en Turkish Lira, Bonds Crash As 'Secret Gold Trade' Trial Begins, Implicates Leaders <p>For the first time in history, <strong>Turkish 10Y bond yields topped 13% this morning and the currency just plunged to a new record low</strong> against the dollar as the<a href=""><strong> trial of the gold-trader at the center of the &quot;secret gold trade&quot; with Iran begins today</strong></a> and looks set to implicate Turkish leadership as we warned.</p> <p><a href=""><em>For full background on this stunning case, read here.</em></a></p> <p><a href=""><img alt="" src="" style="width: 600px; height: 325px;" /></a></p> <p>As Bloomberg reports, Turkish Deputy Prime Minister Bekir Bozdag is furious...</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>The U.S. case against Turkish-Iranian gold trader Reza Zarrab<strong> &ldquo;has no legal basis.&quot;</strong></p> <p>&nbsp;</p> <p><strong>The trial is nothing more than an execution through the U.S., of the &ldquo;unsuccessful Dec. 17-25 coup attempt in Turkey,&rdquo; by Fetullah Gulen&rsquo;s organization,</strong> referring to a corruption probe in 2013 that was quashed</p> </blockquote> <p>And according to Ilnur Cevik, a senior adviser to Turkish President&nbsp;Recep Tayyip Erdogan, U.S. attorneys and the judge overseeing the trial have accepted illegally obtained and tampered information as evidence.</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><strong>There is an attempt to implicate Turkish leaders in the case</strong>, Cevik says in remarks on state-run TRT news radio.</p> <p>&nbsp;</p> <p>Cevik then stated that <strong>Preet Bharara, the former U.S. Attorney for the&nbsp;Southern District of New York, &ldquo;is the one who prepared this plot&rdquo; and he is linked to Gulen,</strong> who is accused of masterminding last year&rsquo;s failed coup attempt in Turkey, adding that Bharara&rsquo;s successor&nbsp;Joon H. Kim&nbsp;is now continuing case in same manner.</p> <p>&nbsp;</p> <p><strong>Both prosecution and judge are linked to FETO, </strong>Cevik says (referring to the Turkish govt&rsquo;s term for people affiliated with Gulen&rsquo;s network that it considers a terrorist organization).</p> </blockquote> <p><strong>The case is an effort by Gulenists to come after Turkish govt after last year&rsquo;s failed coup attempt, </strong>he added, saying:</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>U.S. Justice Dept. should immediately intervene in the case if it wants to<strong> &ldquo;avoid disgrace.&rdquo;</strong></p> <p>&nbsp;</p> <p><em><strong>&ldquo;The court of the Southern District of New York is seized by the people of FETO. Where is justice in this trial?&rdquo;</strong></em></p> </blockquote> <p>Quite some accusations for innocent men?</p> <p><strong>And the impact of this uncertainty is clear.</strong> The Lira is tumbling to new record lows against the dollar - extending losses following Erdogan&#39;s anti central-bank-independence comments last week...</p> <p><a href=""><img alt="" src="" style="width: 600px; height: 321px;" /></a></p> <p>&nbsp;</p> <p>And Turkish 10Y Bond Yields topped 13% for the first time in history...</p> <p><a href=""><img alt="" src="" style="width: 600px; height: 315px;" /></a></p> <p>It seems time&#39;s up for delaying this...</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><em><strong>&ldquo;The Zarrab case is the one to watch in terms of U.S.-Turkey relations,&rdquo; </strong></em>Tim Ash, a London-based strategist for BlueBay Asset Management LLP, said in an email to clients.</p> <p>&nbsp;</p> <p>&ldquo;Zarrab is thought to have been close to the Erdogan family and, indeed, he was given Turkish citizenship, alongside Iranian.<strong> This is a real stress point.&quot;</strong></p> </blockquote> <p><a href=""><em>As Bloomberg notes, </em></a><strong>Erdogan tried to pressure U.S. officials during the&nbsp;Barack Obama&nbsp;and&nbsp;Donald Trump&nbsp;administrations to drop the prosecution of the trader</strong> and has complained in public comments that prosecutors were trying to extract a confession from Zarrab and turn him into an informant. He also claimed President&nbsp;Trump&nbsp;apologized for the prosecution in a phone call.</p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="944" height="505" alt="" src="" /> </div> </div> </div> Barack Obama Bond Corruption Donald Trump Fethullah Gülen Iran Islam KIM Law Middle East Politics Politics of Turkey Recep Tayyip Erdo?an Reza Zarrab Turkey Turkey Turkey–United States relations UN Court Mon, 20 Nov 2017 13:40:25 +0000 Tyler Durden 607581 at Inflation and Counterfeit Credit, Report 19 Nov 2017 <p>Let’s take a look at an often-repeated idea that is popular in the gold and alternative investing communities. The government possesses a printing press. Therefore, it will never default. It will just inflate its way out of the debt. It will devalue the dollar.</p> <p>The government does not set the value of the dollar. And it has no mechanism to set it. So, logically, it has no mechanism to reset it. It cannot devalue it. In the same way, you cannot lower yourself down by your bootstraps since you are not lifting yourself up by them in the first place.</p> <p>We must emphatically state that the government does <strong>not print</strong>. It <strong>borrows</strong>. Congress does not have a printing press, to create greenbacks. It has a Treasury that can sell bonds to cover whatever payments the government is obligated to make that it has not got tax revenues for. Over the past year, for example, the government increased its debt by over 630 billion dollars.</p> <p>This leads us to inflation. We have a different view than the mainstream. We define inflation as the counterfeiting of credit. In legitimate credit, the borrower has both the means and intent to repay. But clearly in the case of perpetual government deficits, these elements are lacking. This is <em>inflation</em>. Not the changes that may result to consumer prices. Not the change in quantity of dollars. The fraud itself is the root of it, and therefore properly deserves the moniker <em>inflation</em>.</p> <p>The Federal Reserve, of course, is a key participant in this monetary inflation scheme. Does the Fed have a printing press? Does the Fed print?</p> <p>Like any bank, the Fed borrows to fund its purchases of interest-paying assets. It earns a spread between what it pays (currently about 1.25%) and what its asset portfolio pays (over 2%). The commercial banks currently deposit over $2.1 trillion in excess reserves, and the Fed’s total liabilities are over $4.4 trillion including Federal Reserve Notes (on which the Fed pays zero). Unlike any commercial bank, there is a <strong>law that obligates us to treat the Fed’s liabilities as if they were money</strong>.</p> <p>This last fact is what makes the inflationary scheme so dangerous (not the possible effect on consumer prices). The Fed borrows to lend to the government (and manipulate the interest rate). This means: <strong>the Fed’s liability, the dollar, is only good so long as the Fed’s asset, which is the government’s liability, is good</strong>. Please re-read that and think. This one statement is the undoing of much of modern monetary economics.</p> <p>Of course, with the Fed’s liability being treated as money by nearly everyone—including those who oppose the existence of the Fed, and who speculate on alternative monetary assets like gold and bitcoin—the Fed is in a unique position. Demand for its liability is unlimited. That is, whatever it wants to borrow, willing lenders are lined up. Not only that, it gets better!</p> <p>Last week, we said:</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>So let’s say you are a farmer in Iowa. What can you do about your debt? Grow and sell more wheat. That is, sell wheat at the bid price.</p> <p>Suppose you are a restaurateur with 5 burger joints. What can you do? Cook and sell more burgers. That is, sell burgers on the bid.</p> <p>If you are a recent college graduate, with college loans to pay off, what can you do? Work and sell more of your labor. That is, dump labor on the bid.</p> <p>And we wonder what supports the value of the dollar! It is the struggles of the debtors. Every debtor is busily working to increase the quantity of every kind of good and service, which is dumped on the bid. Dumping on the bid tends to push the bid down.</p> </blockquote> <p>People are not merely lined up to lend to the Fed, they are outdoing each other, frantically bidding up the Fed’s paper! This is because they, themselves, have borrowed and obligated themselves to repaying their own debts in the same said paper. To service their debts, they must sell goods and services.</p> <p>And people wonder why little to no <em>inflation</em>. They are thinking only of the quantity of dollars, and assuming that as quantity goes up so must prices. However, a system which is sinking deeper into debt has dynamics that cause a different outcome.</p> <p>So this brings us to the premise where we started: the government will just inflate its way out of the debt. The government can borrow more, but will this devalue the dollar?</p> <p>Instead of reiterating a point we have covered above and in previous parts of this series, let’s look at a seemingly unrelated observation about markets. When all participants count on the same outcome, when they are all all-in, when they are all on one side of the boat hoping for this outcome, then you can count on the opposite outcome that all the participants are counting on.</p> <p>The government is in debt up to its eyeballs, the banks, the corporations, the small businesses, the homeowners, the students, the car owners, and even the consumers with credit cards and the former students who attended university in the last decade or two. Everyone owes. Everyone relentlessly bids on the dollar with whatever they have.</p> <p>The outcome they all count on is: the dollar will go down. That is not the outcome they are getting, or will get.</p> <p>We realize that many people think the <em>good</em> goes up and the <em>bad</em> goes down. That is why they expect gold to be $65,000. We are not saying the dollar is good. Quite the contrary. We do not use the words counterfeiting and fraud to mean anything good. We are saying that when government applies perverse incentives, then you get perverse outcomes.</p> <p>A rising dollar is a perverse outcome.</p> <p>We are working on the problem that all borrowing and lending uses the dollar. We offer <a href="" target="_blank" rel="noopener">gold financing, simplified</a> and a <a href="">yield on gold, paid in gold</a>.</p> <hr /> <p>The price of gold went up $19, and the price of silver 42 cents. The price action occurred on Monday, Wednesday and Friday though so far, only the first two price jumps reversed. We promise to take a look at the intraday action on Friday.</p> <p>But first, we want to clarify something in light of our ongoing commentary about the struggles of the debtors and the lack of drivers for rising consumer prices. Just because farmers and restaurateurs are frantically producing and selling like mad, which results in soft prices, does not mean that people cannot begin to buy gold in earnest again.</p> <p>There is not a causal relationship between consumer prices and the price of gold. At times, they can be highly correlated, but then the correlation ends. For example, did you know that <a href="" target="_blank" rel="noopener">the age of Miss America correlated with the number of murders by steam and hot things</a> for 10 years? Let’s look at a chart.</p> <p><a href=""><img src="" width="977" height="638" class="aligncenter size-full wp-image-8415" /></a>NB: we had to put the two numbers, change in consumer prices and change in gold price on two different axes. Though both are percentage changes, gold changes are so much larger that if plotted on the same axis, consumer prices look almost a flatline.</p> <p>You can see a tantalizing relationship between the two traces, at least for a time. At first (we began the graph in 1971 when President Nixon cut the dollar loose from gold), there is a striking correlation.</p> <p>But then there is a marked change post-1981, and if there is a correlation (we have not done the math), it looks much more tenuous. This is when Reagan and Volcker beat inflation (in the mainstream Narrative), or objectively when interest began to fall, when <a href="" target="_blank" rel="noopener">marginal productivity of debt</a> began its uncanny correlation with interest (which we believe is causal), and when <a href="" target="_blank" rel="noopener">yield purchasing power</a> begins to show a kind of hyperinflation.</p> <p>Offhand, we can think of two reasons to buy and own gold: participate in speculative mania and avoid default risk. Right now speculative mania is occurring in crypto currencies so that may (but not necessarily, beware correlation!) shunt such capital flows away from gold. As to default risk, there are signs of rising stress in high yield credit markets, but it’s early yet.</p> <p>Here are the charts of the prices of gold and silver, and the gold-silver ratio.</p> <p><a href=""><img src="" width="900" height="500" class="aligncenter size-full wp-image-8422" /></a></p> <p>Next, this is a graph of the gold price measured in silver, otherwise known as the gold to silver ratio. The ratio fell.</p> <p><a href=""><img src="" width="900" height="500" class="aligncenter size-full wp-image-8421" /></a></p> <p><em>In this graph, we show both bid and offer prices for the gold-silver ratio. If you were to sell gold on the bid and buy silver at the ask, that is the lower bid price. Conversely, if you sold silver on the bid and bought gold at the offer, that is the higher offer price.</em></p> <p><em>For each metal, we will look at a graph of the basis and cobasis overlaid with the price of the dollar in terms of the respective metal. It will make it easier to provide brief commentary. The dollar will be represented in green, the basis in blue and cobasis in red.</em></p> <p>Here is the gold graph showing gold basis and cobasis with the price of the dollar in gold terms.</p> <p><a href=""><img src="" width="900" height="500" class="aligncenter size-full wp-image-8420" /></a></p> <p>We switched from the December to February contracts.</p> <p>The cobasis (our measure of scarcity) of the Feb contract does not show much. Let’s take a look at the continuous basis.</p> <p><a href=""><img src="" width="900" height="500" class="aligncenter size-full wp-image-8419" /></a></p> <p>Here, we do see a tracking with the price of the dollar (inverse of the price of gold, in dollar terms). So what’s going on? Why does the near basis not show what the continuous basis does?</p> <p>Here is a graph of all the contracts.</p> <p><a href=""><img src="" width="977" height="638" class="aligncenter size-full wp-image-8413" /></a></p> <p>We see a noticeable widening of the spread between near and far contracts. This is a steepening of the forward curve. At the end of August, there was less than 20bps difference between the Feb 2018 and Feb 2019 contracts. Now, there is 65bps, and 35bps between Apr 2018 and Feb 2019 contracts.</p> <p>When a price changes, it may or may not be significant (which is rather the meta-point of this Report). But one thing is for sure. When a spread changes, it is telling you something. What is this telling us?</p> <p>Since bottoming about a month ago, farther-out contracts have a rising basis. The Feb contract, by contrast, does not. We think it’s a bit early for the contract roll dynamics (and this is gold, not silver, which generally waits longer).</p> <p>The obvious answer is that speculators are bidding these contracts up. But in this case, it is not relative to spot but relative to the near contract. We are skeptical that speculators would suddenly switch their preference longer-dated contracts.</p> <p>We don’t know the answer but we suspect it may be the lifting of hedges either in the gold mining sector, or perhaps more likely, the bullion dealers. We know that retail product premia are low, due to low retail demand. It seems plausible that dealers would reduce their hedge positions. Since hedging involves buying physical metal product and selling futures (which tends to compress the basis), lifting a hedge involves selling the product and buying the futures. Which tends to push the basis up, and not necessarily the near contract basis. The basis of whichever contracts were used for hedging. It could be longer contracts.</p> <p>We welcome reader input to explain this phenomenon.</p> <p>Now let’s look at silver.</p> <p><a href=""><img src="" width="900" height="500" class="aligncenter size-full wp-image-8418" /></a></p> <p>The story is the same in silver. The graph below of all the silver contracts shows some widening of the spread between near and far contracts but not to the same magnitude as gold.</p> <p><a href=""><img src="" width="977" height="638" class="aligncenter size-full wp-image-8424" /></a></p> <p>In contrast to gold, the basis is flat across all the silver contracts with possibly some increase developing in the further out contracts from November onwards.</p> <p>Now, on to Friday’s spike. Is it like last Friday’s crash, i.e. speculators repositioning?</p> <p>In <a href="" target="_blank" rel="noopener">Part II</a> of this article, we show intraday graphs for both metals.</p> <p>&nbsp;</p> <p>© 2017 <a href="">Monetary Metals</a></p> Bond Business Congress Consumer Prices default Economy Excess Reserves Federal Reserve Finance Financial crises Gold as an investment High Yield Hyperinflation Hyperinflation Inflation Money Precious metals Price Price Action Purchasing Power Silver as an investment United States dollar US Federal Reserve Mon, 20 Nov 2017 13:35:53 +0000 Monetary Metals 607580 at "Merkel Will Have To Go": Bill Blain On What's Next For The Germans <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p><em>“When you turn an election into a three-ring circus, there is the possibility the dancing bear will win..”</em></p> </blockquote> <p>After Sunday night's shocking failure by Merkel to from a government (triggered by the Free Democrats walking out due to irreconcilable differences on refugee policy, energy policy and tax policy) the FT was quick to conclude that "<a href="">Merkel faces worst political crisis of her career</a>." And while Merkel is certainly in hot water, a more appropriate question is what's next for Germany.</p> <p>According to UBS - which has a clear interest in preserving the calm - there are four possible scenarios:</p> <ul> <li>First, Chancellor Merkel could try to re-engage with the FDP and bring it back to the table and start coalition talks. </li> <li>Second, the CDU/CSU could try to approach the SPD to form a grand coalition, which would have an absolute majority. However, the SPD has repeatedly mentioned (again last night) that it is not willing to go for this option and prefers to be in opposition. </li> <li>If these two options do not work (which would be the first time in post-war Germany), either a minority government (Chancellor Merkel dismissed this option on election night) or new elections could follow. </li> </ul> <p>The procedure for new elections, however, involves several steps, as outlined below.</p> <p>The current (grand coalition) government remains in place until a new government is formed, i.e. until parliament votes on a candidate for chancellorship proposed by the Federal President (for which there is no time limit). If no workable coalition can be found, the way towards new elections involves many steps as reported in the press. The Federal President Steinmeier must propose a candidate for chancellorship (normally, this is the candidate put forth by a majority coalition, but he is free to choose others) and parliament would vote on this candidate. If the Federal President's candidate does not obtain an absolute majority (which has never happened before in post-war Germany), parliament has 14 days to propose and vote on a candidate in a second round. If in this second round of voting no candidate obtains an absolute majority, there is a third round of voting where a candidate can be voted as chancellor with only a relative majority. If a candidate is voted with only a relative majority, the Federal President can either appoint the candidate as chancellor (implying a minority government) or dissolve parliament. In the latter case, new elections have to take place 60 days after parliament has been dissolved. At this stage, however, it is unclear whether new elections would<br />produce a significantly different result compared to the last election.</p> <p>To be sure, UBS' view is that no matter how bleak Merke's "crisis" looks, the fallout will likely be limited, to wit: </p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>"even though the EUR dipped on the breakdown of the Jamaica talks, the broader market reaction has been contained. With Merkel's acting government remaining in place, big political decisions on Brexit and EU issues anytime soon appear more difficult, including at the December Euro summit. If the grand coalition no longer remains an option, this could, in our view, lead to some risk-off pressure, the negative fallout for periphery markets (and a wider risk-off) should be contained."</p> </blockquote> <p>Perhaps: for UBS' "calm and collected" outcome to be validated, the ECB may be forced to become more actively engaged in micromanaging risk again, something few have discussed yet.&nbsp; </p> <p>Meanwhile, as things heat up, there has been a bararge of headlines, among which: </p> <ul> <li>GERMAN PRESIDENT URGES PARTIES TO FIND DEAL TO AVOID NEW VOTE</li> <li>STEINMEIER: GERMAN PARTIES SHOULDN'T RETURN MANDATE TO VOTERS </li> <li>SPD'S SCHULZ ASSUMES THERE WILL BE A NEW ELECTION</li> <li>SPD'S SCHULZ ALSO REJECTS GRAND COALITION WITHOUT MERKEL</li> <li>LINDNER: NO GERMAN POLICY CHANGE POSSIBLE WITH GREENS, CDU, CSU</li> </ul> <p>These headline confirm that one of the 4 options highlighted by UBS has been ruled out for Merkel. <strong>The SPD’s Martin Schulz, who performed poorly at the last election, has rejected the idea of re-forming the Grand Coalition by lending his party’s support to Merkel’s government. He has also said that he assumes that there will indeed be a new election, as Citi adds.</strong></p> <p>Another option seemed to be ruled out too, as FDP leader Lindner suggested as recently as a few minutes ago that common ground cannot be found – so the Jamaica coaltion government still looks off the cards, although Merkel will no doubt be hoping to form some sort of minority government.</p> <p><strong>At the moment, this all does seem to be pointing towards new elections for Germany. </strong>Citi Economics explain: </p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>Under Art. 63 of the German constitution, the Bundestag would first have to elect a new Chancellor upon proposal by the President, which is possible with a relative majority after 14 days of nobody getting an absolute majority. The President can then within 7 days confirm the winner or dissolve Parliament, which would lead to early elections within 60 days […] It could start soon and elections could be held probably in January at the earliest”.</p> </blockquote> <p>In any event, for a more practical and unbiased take on what happens next in Germany, we turn to Mint's Bill Blain, who back in September <em>correctly predicted just this outcome,</em> when all of his far better paid peers said the odds of a negotiation failure are negligible. Here is Bill Blain with his take on "<strong>What's next for the Germans."</strong></p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>Ha. Macron must be creasing himself with laughter… I bet he struggled to keep a straight face as he commiserated with the (soon to depart?) Angela… Funny how the good news is all French these days… </p> <p>&nbsp;</p> <p><strong>And in Harare/Berlin an elderly befuddled leader doesn’t know if they are coming or going. </strong></p> <p>&nbsp;</p> <p>Despite triggering of Gotterdammerung, market reaction to the German electoral talks collapse is curiously muted – the Euro taken a minor spanking, and stock markets a tad-let lower. </p> <p>&nbsp;</p> <p>I’m not really surprised at the lack of fireworks. <strong>Markets have become blasé about political noise – understanding how easy it is to over-react. It’s going to be a short holiday week, its year-end and folk are protecting what they’ve made this year. As one heads westwards, interest or cares in German politics diminishes pretty quickly? It’s just something that happens – Isn’t it? </strong></p> <p>&nbsp;</p> <p>Er.. actually…. what’s going on in Berlin is pretty important stuff. Or, at least it should be… </p> <p>&nbsp;</p> <p>I’m trying to get my head round what happened and what cracked – it’s important to understand the collapse to work out what happens next… Last week chums in Berlin assured me it was a just a matter of time before Muti Merkel signed a new coalition deal. Over the weekend it all came apart. </p> <p>&nbsp;</p> <p><strong>It would seem the Greens and the Liberals just didn’t fancy the compromises and potential electoral suicide pact that underlies being Merkel’s stooges. </strong></p> <p>&nbsp;</p> <p>Back in September I warned the coalition process was likely to be far more difficult and fraxious than the market expected. <strong>I even said the chances of an outright failure to agree were as high as 50% – check out Porridge Extra Sept 25th. </strong>I was told I was a know nothing idiot (not disputing it!). But, I didn’t expect crisis this soon. My worst case was a second election triggered early next year – and Merkel squeezed out. </p> <p>&nbsp;</p> <p>I’m going to spend some time talking around contacts and putting together some new scenarios, but I’m struggling to find much upside. </p> <p>&nbsp;</p> <p><strong>I suspect Merkel will have to go. The outlook is for a complete re-jig in German politics; out with the old, and in with something new(er). </strong>New coalition discussions or an election will be equally drawn out. <strong>A new administration could be vulnerable, weak and uncertain as the “leader of Europe” is entirely inward focused in coming months/years. </strong></p> <p>&nbsp;</p> <p><strong>Don’t underestimate the sentiment effects on Europe. Who is going to lead the agenda re closer union, banking union and reform of the ESM, bailout and QE policies? And what about dealing with Putin, Italian elections next year, the inevitable Greece bailout blow up, renewed immigration crisis, Brexit, a blow-up with Trump, and a Frenchman to replace Draghi at the helm of the ECB looking increasingly nailed-on. </strong></p> <p>&nbsp;</p> <p>And I reckon the young emperor in Paris, Macron, is going to be disappointed – if he see this as his chance to re-establish French leadership at the core of Europe, he may be well disappointed. If Berlin doesn’t care.. who’s interested? </p> <p>&nbsp;</p> <p>Perhaps not – Yoorp is a long-game.</p> </blockquote> <p>Finally, with Merkel now fighting for her career and political survival, the EUR has yet to skip a beat, and remains solidly stuck to the 1.1770 strange attractor.</p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="690" height="388" alt="" src="" /> </div> </div> </div> Angela Merkel Chancellors of Germany Christian Democratic Union of Germany Coalition government Emmanuel Macron European Central Bank European Parliament European Union Finance Frank-Walter Steinmeier Free Democratic Party German federal election German Lutherans Germany Government Grand coalition Grand Coalition Greece headlines Martin Schulz Merkel’s government Politics Politics of Germany President of Germany UBS Mon, 20 Nov 2017 13:24:32 +0000 Tyler Durden 607579 at A "New Era" In Chinese Regulation Means Turmoil For $15 Trillion In China's "Shadows" <p>The post-Party Congress attempts to deleverage and crack down on the worst abuses in China&rsquo;s horrific credit bubble - especially the country&#39;s $15 trillion in wealth-management products - saw China&rsquo;s authorities turn their sights on shadow banking and wealth management products (WMPs) specifically. On their way out are &quot;guaranteed returns&quot; and &ldquo;capital pools&rdquo;, which had turned the wealth management sector into a Ponzi scheme. In a radical and &quot;shocking&quot; departure from the historic norm, financial institutions will have to offer yields based on the risks and returns of the underlying assets.</p> <p>As Citic&#39; Ming Ming summarized China&#39;s shadow reform to Bloomberg, this is &quot;the most comprehensive and most profound regulatory document ever. <strong>This marks the beginning of a new era in financial regulation as it implies the end of a &lsquo;big leap&rsquo; in the asset management industry. </strong>Going forward, it means more compliance requirements, tighter risk control, and thus slower but better-quality growth.&quot;</p> <p>This might go down like a cup of cold sick with Chinese savers who have become accustomed to circumventing financial repression via these products. However - and this is significant - the new regime doesn&rsquo;t take effect until the end of June 2019. We can only guess the delay reflects the enormity of the problems discovered by China&rsquo;s regulators when they finally looked under the hood.</p> <p>The shadow banking measures, announced after Friday&rsquo;s close, hit Chinese equities when they opened Monday. However, the sharp fall in the Shanghai Composite miraculously turned around late in the day, closing up 0.3%. Either, &ldquo;bargain hunters&rdquo; saw a too-good-to-be-missed opportunity as Bloomberg TV implied, or the &ldquo;National Team&rdquo; was ordered off the bench late in the session. We think we know the answer and our sense is that the authorities are increasingly concerned about risk-taking in Chinese equity markets currently. On Friday we highlighted the warning from the state-owned Xinhua news agency that the share price of China&rsquo;s largest liquor maker, Kweichow Moutai, was rising too fast.</p> <p>This is <a href="">Bloomberg</a>&#39;s take on the market reaction to the new shadow banking rules.</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>China&rsquo;s sweeping new plan to rein in its shadow banking industry rippled through the nation&rsquo;s stock market on Monday, sending the Shanghai Composite Index to a two-month low. Investors pushed the benchmark gauge down as much as 1.4 percent amid concern that the government&rsquo;s latest attempt to tighten supervision of $15 trillion in asset-management products will siphon funds from the market. Developers and brokerages paced losses. While analysts applauded the plan as an important step toward curbing risk in China&rsquo;s financial system, they also warned of turbulence as markets adjust to outflows from popular shadow-banking products.</p> </blockquote> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>The government directives, which are set to take effect in 2019, add to signs that President Xi Jinping is willing to sacrifice growth as he tries to put the world&rsquo;s second-largest economy on a more stable financial footing. &ldquo;The rules dealt a blow to the market,&rdquo; said Zhang Gang, a Shanghai-based strategist with Central China Securities Co. &ldquo;A lot of such products had positions in the equity market, and those that don&rsquo;t qualify under new rules may choose to exit some small and medium caps.&rdquo;</p> </blockquote> <p>In the midst of the sell-off, the major losers in the real estate sector were China Vanke Co. which fell 4.9% on the wild(er) Shenzhen exchange, Poly real Estate which fell 3.2% and Gemdale Corp. which fell 2.6%. Securities dealers tumbled to a five-month low with Citic Securities sliding 3.7% at one point. Meanwhile, trading in China&rsquo;s government bond market was relatively civilized, with the benchmark 10-year yield rising 1 basis point to 3.97% - remaining on the &ldquo;right&rdquo; side of the psychologically important 4.0% level. That said, the benchmark has risen 24 basis point since the end of the Party congress on 24 October 2017.&nbsp;</p> <p>This was <a href="">Reuters&rsquo;</a> take on the new shadow banking measures.</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>The guidelines unified rules covering asset management products issued by banks, trust firms, insurance asset management companies, securities firms, funds and futures companies, the People&rsquo;s Bank of China (PBOC) said in a joint statement with the banking, insurance, securities and foreign exchange regulators&hellip;The new rules aim to close loopholes that allow regulatory arbitrage, reduce leverage levels to curb asset price bubbles and rein in shadow banking activity.</p> </blockquote> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>The new rules will set leverage limits for asset management products. They will cap the total assets to net assets ratio at 140 percent for open mutual funds and 200 percent for private funds. Investors will be prohibited from pledging their shares in asset management products as collateral to obtain financing, a practice that would increase leverage. The central bank also said financial institutions must break the practice of providing investors with implicit guarantees against investment losses.</p> </blockquote> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>Financial institutions will also be forbidden from creating a &ldquo;capital pool&rdquo; to manage funds raised through asset management products. The practice allows banks to roll over the products constantly. The investment losses will be implicitly covered by the new product issuance&hellip;Financial institutions will also be forbidden from creating a &ldquo;capital pool&rdquo; to manage funds raised through asset management products. The practice allows banks to roll over the products constantly. The investment losses will be implicitly covered by the new product issuance.</p> </blockquote> <p>While the new shadow banking measures are obviously welcome, we fear that they are coming too late to prevent a catastrophic bursting of China&rsquo;s debt bubble. As we said in <a href="">&ldquo;The Complete Idiot&rsquo;s Guide To The Biggest Risks In China&rdquo;</a>.</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>we have said for the past 3 years, the next global crisis will start in China, and with Xi&#39;s role cemented for the next 5 years (if not for life) the smart thing would be to have the Chinese economic hiccup (because recession is clearly a taboo under central planning) as soon as possible, so the economy can recover by 2022.</p> </blockquote> <p>As ever, it&rsquo;s the timing of China&rsquo;s &ldquo;Minsky moment&rdquo; which remains elusive. Having said that, we suspect that the Xinhua warning about Kweichow Moutai was a signal that the Chinese leadership is on high alert regarding a spike in equity volatility. As we said on Friday.</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>In retrospect, perhaps the Xinhua warning was not so strange: after China&#39;s debt-fueled stock market bubble burst in 2015, wiping out $5 trillion of value, Chinese policy makers have acted to restrain excessive speculation in equities. &ldquo;Xinhua is concerned that a runaway rally in a heavyweight like Kweichow will hamper the stability of the overall market,&rdquo; said Hao Hong, chief strategist at Bocom International Holding Co in Hong Kong.</p> </blockquote> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>And while one can wonder why China is suddenly so concerned about even the hint of potential vol spike in the stock market - suggesting that even a modest selloff could have dramatic consequences for the Chinese financial sector - it is certainly strange that whereas even China is acting to restrain the euphoria of its citizens over fears of what happens during the next bubble, in other &quot;developed&quot; countries, the local central bankers, politicians and TV pundits have no problem in forcing retail investors to go all risk assets when the market is at all-time highs.</p> </blockquote> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>As for China, it will have truly gone a full &quot;180&quot;, if in a few months time instead of arresting sellers as it did in the summer of 2015, Beijing throw stock buyers in prison next.</p> </blockquote> <p>Below <a href="">Bloomberg</a> summarises the key takeaways from the new rules followed by the reactions from several analysts and portfolio managers.</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><ul> <li>This adds to evidence that containing financial risks is a priority for President Xi Jinping after he cemented his grip on power at the Communist Party congress in October</li> <li>The rules may bring an end to popular short-term investment products that offer fixed rates of return; returns from new products will fluctuate and more accurately reflect the risks of their underlying assets</li> <li>Uniform guidelines for banks, trusts, insurers, fund managers and brokerages will help prevent regulatory arbitrage</li> <li>The move to end implicit guarantees is welcome, but it could spur outflows and weigh on domestic securities markets</li> <li>Smaller banks are more vulnerable to a loss of off-balance sheet funding than larger ones</li> <li>A grace period through June 30, 2019, will help contain market fallout and give financial institutions time to prepare</li> <li>Watch for follow-through; authorities have clamped down on shadow banking before, only to ease up because they feared an economic slowdown</li> </ul> </blockquote> <ul> <li><strong>David Loevinger at TCW Group</strong></li> </ul> <p>There&rsquo;s no let-up post the party congress. They still have their foot on the brake and they will keep it there for a long time. Chinese leaders have realized that disorderly unwinding of financial leverage presents one of the biggest risks to the economy. The importance of this announcement is that the rule is being applied across financial sectors. Similar financial products are treated the same way, regardless of which financial institution offers it and who regulates it. That&rsquo;s important because regulation arbitraging had been rampant. It looks like a signal that the new financial stability and development committee may mean business in terms of harmonizing financial regulations. You cannot just say there&rsquo;s no longer guarantees. You have to show people that there&rsquo;s no longer guarantees. The only way to show it is to force investors to take losses. They have to see it to believe it.</p> <ul> <li><strong>Patrick Chovanec at Silvercrest Asset Management</strong></li> </ul> <p>It&rsquo;s a good move, and much overdue, but depends entirely on the follow-through. There have been plenty of less formal crackdowns before. They&rsquo;ve broken down because Chinese authorities have been unwilling to face the consequences of truly cutting off questionable credit. The private wealth products are now thoroughly embedded in the heart of China&rsquo;s financial system and play a key role in rolling over non-performing debt. Investors believe they will be paid regardless of whether the investment performs or not. If investors can lose their money, they will stop funding these sorts of assets. Is China willing to accept what that means?</p> <ul> <li><strong>Ming Ming at Citic Securities</strong></li> </ul> <p><strong>It is the most comprehensive and most profound regulatory document ever. This marks the beginning of a new era in financial regulation as it implies the end of a &lsquo;big leap&rsquo; in the asset management industry. Going forward, it means more compliance requirements, tighter risk control, and thus slower but better-quality growth.</strong></p> <ul> <li><strong>Yang Ling at StarRock Investment Management</strong></li> </ul> <p>Banks, the industry&rsquo;s big brother with 29 trillion yuan of WMPs, will bear the brunt of the new rules, which foreshadow the disappearance of products with less than three months maturity and those offering a promised rate of return. That means banks can no longer invest in long-term assets by rolling over short-term products to profit from the duration mismatch. To investors, banks&rsquo; WMPs will no longer be risk-free.</p> <ul> <li><strong>James Stent, author and former director at China Minsheng</strong></li> </ul> <p>What&rsquo;s important to me is there&rsquo;s a lot of time given for actual implementation. That is to ensure that as they begin to bring the wealth management products under control, they will not be too disruptive on the economy. They will give people plenty of time to react. I think it is very favorable news. It again shows foreigners all their worries that these are going to bring down the Chinese economy are nonsense. The Chinese have been well aware of the risks. They have been planning this probably for at least a year and a half. Now they are implementing it very slowly and this is good news. I think wealth management products will still be there, but they will change the pricing to reflect the risks.</p> <ul> <li><strong>Stephen Jen at Eurizon SLJ Capital</strong></li> </ul> <p>Chinese investors also need to be conditioned to understand that investments have risks, and that corporate bonds should carry higher spreads than what we are seeing now. The real test of whether these implicit government guarantees are indeed lifted will only come when an important corporate defaults. Only time will tell.</p> <ul> <li><strong>Becky Liu at Standard Chartered Bank</strong></li> </ul> <p>The rules close many loopholes that had resulted from previously segregated regulatory frameworks. They have turned out to be tighter than a version leaked earlier this year and are likely to lead to slower asset growth in the foreseeable future. They will materially curb asset managers&rsquo; ability to increase leverage, both market and structural, in the long-term. In the near term, the bond market&rsquo;s current defensive tone will likely continue. In the medium term, due to limitations on non-standard products and leverage, demand for standardized products such as bonds and equities will increase, while that for non-standard products will decrease.</p> <ul> <li><strong>Jiang Chao at Haitong Securities</strong></li> </ul> <p>The new rules will reverse the asset management industry&rsquo;s aggressive expansion, leading to a drop in entrusted investments -- which are funds that were farmed out by banks to external money managers. Demand for bond allocation is likely to be curbed, and money will return to lower-risk assets from high-yielding, non-standard assets with poor liquidity.</p> <ul> <li><strong>Pan Jie at Orient Securities</strong></li> </ul> <p>Money-market fund yields are likely to replace that of WMPs to become new risk-free rates. The new rules are negative to lower grades and will lead to wider credit spreads. This is because it will now be difficult for new WMPs to invest in such securities.<br />&nbsp;</p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="780" height="420" alt="" src="" /> </div> </div> </div> Bank Banking Bond Business central China China China’s government Chinese financial system CITIC Securities Communist Party Congress Duration Mismatch Economic bubble Economy Equity Markets Finance Finance in China Financial crises Financial markets Financial Regulation Financial services Financial system fixed Guosen Securities Hong Kong Investment management Money Oxford University People's Bank of China Real estate Recession Reuters Shadow Banking Shadow banking system Shenzhen SSE 50 Standard Chartered Subprime mortgage crisis Systemic risk Volatility Yuan Mon, 20 Nov 2017 12:56:59 +0000 Tyler Durden 607567 at Frontrunning: November 20 <ul> <li>Merkel faces worst political crisis of her career (<a href="">FT</a>)</li> <li>Europe Faces a Hamstrung Germany as Merkel’s Coalition Bid Fails (<a href="">BBG</a>)</li> <li>Merkel’s Failure Is Bad News for May (<a href="">BBG</a>)</li> <li>What’s Left For Noble Group Creditors: The Answer’s in Jamaica (<a href="">BBG</a>)</li> <li>Bitcoin's White-Knuckle Ride Continues as It Dashes Past $8,000 (<a href="">BBG</a>)</li> <li>UK Preparing Enhanced Brexit Cash Offer (<a href="">BBG</a>)</li> <li>Soros attacks ‘hate-mongering’ of Orban’s Hungary&nbsp; (<a href="">FT</a>)</li> <li>Soros Says Smear Campaign Is Based on Spies and Lies (<a href="">BBG</a>)</li> <li>Putin plan to rejuvenate Russian politics makes slow progress (<a href="">Reuters</a>)</li> <li>China Clampdown Signals ‘New Era’ for $15 Trillion in Funds (<a href="">BBG</a>)</li> <li>Trump open to dropping healthcare provision in Senate tax bill: aide (<a href="">Reuters</a>)</li> <li>Americans Will Have Their Cheapest Thanksgiving Since 2013 (<a href="">BBG</a>)</li> <li>Czech Tycoon Faces Test in Parliament as Lawmakers Pick Leaders (<a href="">BBG</a>)</li> <li>Canada, Mexico to question U.S. auto content demands at NAFTA talks (<a href="">Reuters</a>)</li> <li>Should America’s Upper Middle Class Take the Biggest Tax Hit? (<a href="">BBG</a>)</li> <li>Limits on Trump’s Power to Shape Courts Fall Away (<a href="">WSJ</a>)</li> <li>Marvell Technology to buy Cavium for $6 billion (<a href="">Reuters</a>)</li> <li>Toshiba gains breathing room with $5.4 billion share issue to overseas investors (<a href="">Reuters</a>)</li> <li>Alibaba Bets $2.9 Billion It Can Take on Wal-Mart in China (<a href="">BBG</a>)</li> <li>Top of the Market? That Could Be a Good Thing (<a href="">WSJ</a>)</li> <li>Two Experimental Roche Drugs Succeed in Key Patient Studies (<a href="">BBG</a>)</li> <li>How China’s Acquisitive HNA Group Fell From Favor (<a href="">WSJ</a>)</li> </ul> <p><strong>Overnight Media Digest</strong></p> <p><em><span style="text-decoration: underline;">WSJ</span></em></p> <p>- Maria Contreras-Sweet, who led the Small Business Administration under President Barack Obama, has submitted an offer to acquire Weinstein Co. Contreras-Sweet said she hopes to be executive chairwoman of a majority-female board heading the company.</p> <p>- Marvell Technology Group is nearing a deal to buy chip maker Cavium Inc for about $6 billion. The deal would comprises 50 percent cash and 50 percent stock and values Cavium at $80 or more a share.</p> <p>- Senator Susan Collins recited a list of concerns she had with the Republican tax bill barreling through the Senate, raising pressure on the party's leadership to slow its progress and make changes to secure passage.</p> <p>- The Trump administration is adding hurdles and increasing scrutiny in the employment-visa application process, making it harder for businesses to hire foreign workers, and companies and immigration attorneys are bracing for more changes soon.</p> <p>&nbsp;</p> <p><em><span style="text-decoration: underline;">FT</span></em></p> <p>MPs will present draft legislation on Monday intended to end exploitation and close employment loopholes in the underbelly of Britain’s labour market.</p> <p>Greece’s central bank governor is under investigation by an anti-corruption prosecutor over the alleged leaking of an auditor’s report on Piraeus Bank SA, a troubled Greek lender accused of violating capital controls imposed at the height of the country’s financial crisis.</p> <p>Co-working start-up WeWork is ramping up efforts to sell office space to global banks as the uncertainties of Brexit weigh on institutions’ property plans.</p> <p>Eight of the world’s largest banks are set to discuss financial settlements with the European Commission, drawing a line under a four-year probe into allegations they formed a cartel to rig the global foreign exchange market. </p> <p>&nbsp;</p> <p><em><span style="text-decoration: underline;">NYT</span></em></p> <p>- The soccer club A.C. Milan is bleeding money after a spending spree on star players and is seeking new investors or a refinancing of the high-interest loan that Chinese businessman Li Yonghong took to buy the club. That loan comes due in a year.</p> <p>- Honda motor Co said it would recall about 800,000 Odyssey minivans in the United States because of problems with locking adjustable seats into place.</p> <p>- According to a new study based on a continuing national health survey, 60.7 percent of children and 50 percent of adults drank a sugary beverage on any given day in 2014, down from 79.7 percent of children and 61.5 percent of adults in 2003.</p> <p>- Justice League collected a disappointing $96 million at North American theaters over the weekend, or 42 percent less than its franchise predecessor, "Batman v Superman: Dawn of Justice," had over its first three days in March 2016. It was enough to top the weekend box office, but analysts had expected "Justice League" to take in at least $110 million based on surveys that measure pre-release audience interest.</p> <p>&nbsp;</p> <p><em><span style="text-decoration: underline;">Canada</span></em></p> <p>THE GLOBE AND MAIL</p> <p>** Negotiators are making progress on less contentious portions of the North American free-trade agreement – such as slashing red tape for exporters and standardizing food-safety regulations between Mexico, Canada and U.S. – while punting the more difficult ones to future rounds of talks.</p> <p>** U.S. investment bank JPMorgan Chase &amp; Co has emerged as the biggest buyer of second-hand cargo freighters this year, after it bought 12 ships for $250-million (U.S.) according to VesselsValue Ltd.</p> <p>** Canadian leisure-travel provider Transat AT Inc's Chief Executive Jean-Marc Eustache says he plans to step down and hand the chief executive job to current operations boss Annick Guérard.</p> <p>NATIONAL POST</p> <p>** Canadian Prime Minister Justin Trudeau is expected to announce he is heading to Beijing early next month to launch free trade talks with</p> <p>&nbsp;</p> <p><em><span style="text-decoration: underline;">Britain</span></em></p> <p>The Times</p> <p>Accrol, which makes toilet rolls for Lidl and other retailers, is poised to unveil plans to raise new funds in an effort to escape a cash crisis.</p> <p>The chancellor Philip Hammond is poised to throw a tax lifeline to oil and gas producers this week in an attempt to unleash an estimated 40 billion pounds of new North Sea investment.</p> <p>The Guardian</p> <p>Philip Hammond has dismissed calls from the head of the NHS for an emergency cash injection of 4 billion pounds, as he said people running public services always predict "Armageddon" before a budget.</p> <p>The editor-in-chief of the Mirror titles has indicated that their parent group will face deeper job losses across its 5,000-plus workforce if it fails to seal a 130 million pound deal to buy Richard Desmond's Express and Star newspapers and celebrity magazine OK!</p> <p>The Telegraph</p> <p>House building is the "number one priority" in the Budget and the "powers of the state" will be used to force construction numbers up to 300,000 per year, Chancellor Philip Hammond said.</p> <p>The Government looks to have given a rival bid to develop Heathrow's third runway a lift after stating for the first time it welcomed competition in the construction of the nation's airports.</p> <p>Sky News</p> <p>A consortium of bondholders is on the brink of gaining control of BrightHouse, the UK's biggest rent-to-own retailer, as part of a 220 million pound restructuring of the troubled company.</p> <p>The Independent</p> <p>Aled Jones has reportedly been taken off BBC broadcasts following an allegation about "inappropriate contact" by a female colleague.</p> <p>Britain is poised to increase its Brexit "divorce bill" offer to Brussels, Philip Hammond has signalled, ahead of a fresh Cabinet clash on the issue.</p> Barack Obama BBG Bitly Brexit Business Business Central European University China Counterculture of the 1960s Creditors Czech European Commission Finance George Soros Germany Greece’s central bank Hungary JPMorgan Chase Justice League Mexico Money NHS Philip Hammond Reuters Senate Small Business Administration Speculators Thomson Reuters Trump Administration Mon, 20 Nov 2017 12:41:31 +0000 Tyler Durden 607575 at Money and Markets Infographic Shows Silver Most Undervalued Asset <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;"><strong><a href="">Money and Markets Infographic Shows Silver Most Undervalued Asset</a></strong></p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;"><strong>- Silver remains severely under owned and under valued asset<br />- Entire silver market worth tiny $100 billion shown in one tiny square<br />- "All of the World’s Money and Markets in One Visualization"</strong><br /><strong>- Must see 'Money and Markets' infographic shows relative size of key markets: silver bullion, gold bullion, cryptocurrencies/ bitcoin, largest companies, 50 richest people, Fed balance sheet, currency, stocks, property, cash, debt &amp; derivatives</strong><br /><strong>- Small allocation by investors and world's richest will see silver surge like bitcoin</strong></p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;">&nbsp;</p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px; text-align: center;"><a href=""><img src="" width="720" height="908" style="height: auto; max-width: 100%; display: block; margin-left: auto; margin-right: auto;" class="wp-image-12431 aligncenter" /></a><strong>Click to enlarge. Source:&nbsp;Visual Capitalist</strong></p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;"><strong>by</strong>&nbsp;<strong><a href="" target="_blank">Visual Capitalist</a></strong></p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;">Millions, billions, and trillions…</p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;">When we talk about the giant size of Apple, the fortune of Warren Buffett, or the massive amount of global debt accumulated – all of these things sound large, but they are actually extremely different in magnitude.</p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;">That’s why visualizing things spatially can give us a better perspective on money and markets.</p> <h2 style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif;">HOW MUCH MONEY EXISTS?</h2> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;">This infographic was initially created to show how much money exists in its different forms. For example, to highlight how much physical cash there is in comparison to broader measures of money which include saving and checking account deposits.</p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;">Interestingly, what is considered “money” depends on who you are asking.</p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;">Are the abstractions created by Central Banks really money? What about gold, bitcoins, or other hard assets?</p> <h2 style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif;">A NEW MEANING</h2> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;">However, since we first released this infographic in 2015, “All the World’s Money and Markets” has taken on a different meaning to us and many others. It’s a way of simplifying a complex universe of currencies, assets, and other financial instruments in a way that people can understand.</p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;">Numbers represented in the data visualization range from the size of the above-ground silver market ($17 billion) to the notional value of all derivatives ($1.2 quadrillion as a high-end estimate). In between those two extremes, we’ve added many other familiar measures, such as the GDP of California, the value of equities, the real estate market, along with different money supply metrics to give perspective.</p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;">The end result? A visually pleasing, but enlightening new way to understand the vast universe of global assets.</p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;"><em><strong><a href="" target="_blank">All of the World’s Money and Markets in One Visualization</a>&nbsp;via&nbsp;<a href="" target="_blank">Visual Capitalist</a></strong></em></p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;"><strong><br />Related Content</strong></p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;"><strong><a href="" target="_blank">Silver Very Undervalued from Historical Perpective of Ancient Greece</a></strong></p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;"><strong><a href="" target="_blank">Silver Production Has “Huge Decline” In 2nd Largest Producer Peru</a></strong></p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;"><strong><a href="" target="_blank">Silver Bullion Prices Set to Soar</a></strong></p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;"><img src="" width="608" height="254" style="height: auto; max-width: 100%;" class="alignnone size-large" /></p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;">&nbsp;</p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;"><strong>News and&nbsp;Commentary</strong></p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;"><strong><a href="">Gold holds near one-month peak despite firmer dollar (</a></strong></p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;"><strong><a href="">Euro Drops as German Talks Fail; Asian Stocks Slip (</a></strong></p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;"><strong><a href="">Fed readiness to raise rates next month and a wariness about next recession (</a></strong></p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;"><strong><a href="">Bitcoin Soars Past $8,000 as Technology Shift Concern Vanishes (</a></strong></p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;"><strong><a href="">Gold smugglers now prefer Europe over Gulf countries: Customs (</a></strong></p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;"><a href=""><img src="" style="height: auto; max-width: 100%;" /><br /></a>Source: Bloomberg</p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;"><strong><a href="">Prepare to bet against bitcoin as it becomes civilised - Tett (</a></strong></p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;"><strong><a href="">Gold Price Suppression - Zero Hedge invites Financial Times to heed GATA (</a></strong></p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;"><strong><a href="">Gold Versus Bitcoin: The Pro-Gold Argument Takes Shape (</a></strong></p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;"><strong><a href="">Upsurge in big earthquakes predicted for 2018 as Earth rotation slows (</a></strong></p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;"><strong><a href="">Arab League Holds Emergency Session: Iran And "Terrorist" Hezbollah Must Be Stopped (</a></strong></p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;"><strong>Gold Prices (LBMA AM)</strong></p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;">20 Nov: USD 1,292.35, GBP 974.82 &amp; EUR 1,096.43 per ounce<br />17 Nov: USD 1,283.85, GBP 969.31 &amp; EUR 1,088.19 per ounce<br />16 Nov: USD 1,277.70, GBP 969.01 &amp; EUR 1,085.53 per ounce<br />15 Nov: USD 1,285.70, GBP 976.62 &amp; EUR 1,086.29 per ounce<br />14 Nov: USD 1,273.70, GBP 972.47 &amp; EUR 1,086.59 per ounce<br />13 Nov: USD 1,278.40, GBP 977.59 &amp; EUR 1,097.89 per ounce<br />10 Nov: USD 1,284.45, GBP 976.44 &amp; EUR 1,102.19 per ounce</p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;"><strong>Silver Prices (LBMA)</strong></p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;">20 Nov: USD 17.15, GBP 12.94 &amp; EUR 14.56 per ounce<br />17 Nov: USD 17.09, GBP 12.95 &amp; EUR 14.49 per ounce<br />16 Nov: USD 17.04, GBP 12.92 &amp; EUR 14.48 per ounce<br />15 Nov: USD 17.12, GBP 13.00 &amp; EUR 14.45 per ounce<br />14 Nov: USD 16.94, GBP 12.92 &amp; EUR 14.45 per ounce<br />13 Nov: USD 16.93, GBP 12.93 &amp; EUR 14.53 per ounce<br />10 Nov: USD 17.00, GBP 12.92 &amp; EUR 14.60 per ounce</p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;"><strong><br />Recent Market Updates</strong></p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;"><strong><a href="">-&nbsp;Is New Fed Chief A “Swamp Critter Extraordinaire”?</a></strong><br /><strong><a href="">-&nbsp;Deepening Crisis In Hyper-inflationary Venezuela and Zimbabwe</a></strong><br /><strong><a href="">-&nbsp;UK Debt Crisis Is Here – Consumer Spending, Employment and Sterling Fall While Inflation Takes Off</a></strong><br /><strong><a href="">-&nbsp;Protect Your Savings With Gold: ECB Propose End To Deposit Protection</a></strong><br /><strong><a href="">-&nbsp;Internet Shutdowns Show Physical Gold Is Ultimate Protection</a></strong><br /><strong><a href="">-&nbsp;Gold Coins and Bars Saw Demand Rise 17% to 222T in Q3</a></strong><br /><strong><a href="">-&nbsp;Prepare For Interest Rate Rises And Global Debt Bubble Collapse</a></strong><br /><strong><a href="">-&nbsp;Platinum Bullion ‘May Be One Of The Only Cheap Assets Out There’</a></strong><br /><strong><a href="">-&nbsp;World’s Largest Gold Producer China Sees Production Fall 10%</a></strong><br /><strong><a href="">-&nbsp;German Investors Now World’s Largest Gold Buyers</a></strong><br /><strong><a href="">-&nbsp;Gold Price Reacts as Central Banks Start Major Change</a></strong><br /><strong><a href="">-&nbsp;Why Switzerland Could Save the World and Protect Your Gold</a></strong><br /><strong><a href="">-&nbsp;Invest In Gold To Defend Against Bail-ins</a></strong></p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;"><strong>Important&nbsp;<span class="m_-928942620346942956il">Guides</span></strong></p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;">For your perusal, below are our&nbsp;<span class="m_-928942620346942956m_5033479916755799273m_2111833215933341997il">most</span>&nbsp;<span class="m_-928942620346942956m_5033479916755799273m_2111833215933341997il">popular</span>&nbsp;<span class="m_-928942620346942956m_5033479916755799273m_2111833215933341997il">guides</span>&nbsp;in 2017:</p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;"><strong><a href="*W1sFhNs6QLBySW4Rr0Hl90CHT-0/*N5MhbFRBkTqXW95dlRy194d-P0/5/f18dQhb0S5ft8X-f1rW8cCGTT51FcdHN5s9DSvWrM1ZW3MpzC43frry_W8r4Kht63lH28W1lQSSc8y_DL1W8z_p0c67hcl-W1qMTKP5xLd3bN8zTG51RBdNtW3L39B54P7Fz2W8rCHmp3PnStQVS9p0b63dhWbW8mp0Tc5x5KNkW7-XB_567h1CPW8r5PXz49z-4PN2MV0Xm5w8jDW1mw3yc59SFsZN4H-tjrQC5z2VPC2cV7gvpc4W4XYhBl2y9PQJW4sxqtN7h5hQFW28TbSB2Cg_LLW96LzRy5DkRJDW5BRXXj2y4Lc7N3Kd2SV_-Nf6W3brNsz66rKFTW2xH0xz1lcG1VVQBGcH5DQdGhN22JjmzdPgQwW9464-Y5GFs9DW4Rj6Nh6BzJrnN45Ly2MkwRN4W8qYMH51FnsVDW2X9_p02MVHnbN2GZdYq215_BW1J7MZd3mgJK7W4F32xR1JjtM5W4Bn5JG3ZzLH2W5jL56q7dkHC7W3VtW1b1MWhN-W1MKd944yqBfl111" target="_blank">Essential&nbsp;<span class="m_6690301754972839650m_5033479916755799273m_2111833215933341997il"><span class="m_6690301754972839650il">Guide</span></span>&nbsp;To Storing Gold In Switzerland</a></strong></p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;"><strong><a href="*W1sFhNs6QLBySW4Rr0Hl90CHT-0/*W5Hh19S2J1j6jW1gxPj45yTRLt0/5/f18dQhb0S5fw8X-fbXW8cCGTT51FcdHN5s9DSvWrM1YW3MpzC43frry_W8r4Kht63lH28W1lQSSc8y_DL1W8z_p0c67hcl-W1qMTKP5xLd3bN8zTG51RBdNtW3L39B54P7Fz2W8rCHjG25x99KVwyMQc6PVJWyW625bx16Gj8TSW6bVy-525hjVhW83KHrF7J39qHN2m8DqKmmF0wW1jsTjn5VDnrHVbq5fx4TKc2lW6Rjg6t5Pk17jW2xZzRk8LpcPpW36k5sF4FnHNZW1mvfQB2BpzSjN1mT8mr2g4dYW5VZ-P_37vq3BW2--Tfh1w3GzfW5CkFpW6ZccdyW5vvKY_3N2S6fW3KRSNH8yxr7CW7YJp821cQlwRW63x06S1bBvW3W408wWR11rnNbV4Vjkz6NjfdLW55Fr2P5nn1d6W301cwV4GX00sW5hfR428jJDdkW4Cy2w54wj2JxVMFy4w4hyJQMV6N2-D1mPRd4N6YRN0Y4ZDMLD2LMBk7BT1f5Fq5PC03" target="_blank">Essential&nbsp;<span class="m_6690301754972839650m_5033479916755799273m_2111833215933341997il"><span class="m_6690301754972839650il">Guide</span></span>&nbsp;To Storing Gold In Singapore</a></strong></p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;"><strong><a href="*W1sFhNs6QLBySW4Rr0Hl90CHT-0/*W7dc5x_8dXcz0W57pb-W8yRfPY0/5/f18dQhb0Sjv98X-fhGW8cCGTT51FcdHN5s9DSvWrBCVW3MpzC43frry_W8r4Kht63lH28W1lQSSc8y_DL1W8z0sTg7mCbb0W57V1HT7tVHF9W8Z32tg35s628W859LV685kgn-W5mG2963qCNtmW8hTG4j5Zh496W2d551v3pNnKLVLrb9R83_Pn-W7JCxGl81bhDKW7N_KqM11GBXTW41TlcR3TwTqzW19BjML1ks0KjW7RPZVs5-2sjBW7ZzDyK7GLjPjW2KH_vB6SdpRZW1hx1p11Gg3W9W6rwy5K1YZKs5W2gFslL6NqPjwW1tbMwf7n90PHW67SS1j224DVBW6SdFBY1S1FW8W1Th1-Q1X2dwGW1swLvy81myPRW1B9M4Q6SdHPtW7C3gqS89xKZ9W1Ms6WG19gjwJN42ktpLPs031VgkKmy5qqk_FW41Q13s3srYmmW2-yGlm4v9PYhVmLW2J4r5l5jW7fnqv3187HWVW794lJw3T7yBDW1Zq0mT90vVQHW7SNfQy7BfhjRN3QzSrFQN_TjVcGblm3cFvNY0" target="_blank">Essential&nbsp;<span class="m_6690301754972839650m_5033479916755799273m_2111833215933341997il"><span class="m_6690301754972839650il">Guide</span></span>&nbsp;to Tax Free Gold Sovereigns (UK)</a></strong></p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;">Please share our research with family, friends and colleagues who you think would benefit from being informed by it.</p> Apple Arab League Bitcoin Bitcoin Bullion Business Central Banks China European Central Bank Fail Finance Gold Gold coin Greece Hedge Hizballah Iran London bullion market Matter Money Money Supply notional value Precious metals Real estate Recession Reuters Silver as an investment Sovereigns Switzerland US Federal Reserve Warren Buffett Mon, 20 Nov 2017 12:40:02 +0000 GoldCore 607574 at South Detects "Engine Test" At North Korean Nuclear Facility <p>More than two months have passed since North Korea held one of its missile tests - the longest period of tranquility this year, although it may be ending soon: <strong>South Korea&rsquo;s National Intelligence Service warned on Monday that it has detected suspicious activity at the North&rsquo;s missile research facility</strong> &ndash; the latest sign that another test may occur by the end of the year. South Korean intelligence has on more than one occasion captured spy satellite images of the North Korean military transporting equipment from the North&rsquo;s missile facility near Pyongyang. While security analysts speculated at the time that these movements could portend another missile test, none have materialized.&nbsp; &nbsp;</p> <p>However, earlier today,<a href=""> Yonhap reported</a> that South Korean intelligence believe the North recently carried out what&rsquo;s called a missile engine test. <strong>Spy satellites spotted vehicles briskly moving toward the facilities, according to Yi Wan-young, a member of South Korea&rsquo;s parliamentary intelligence committee, which was briefed by Seoul&rsquo;s National Intelligence Service.&nbsp; </strong>All of this suggests North Korea may conduct additional missile tests this year to help polish its long-range missile technology and ramp up the threat against the US. The South&rsquo;s spy agency said it&rsquo;s closely monitoring these developments.</p> <p>As a reminder, the North hasn&rsquo;t tested a missile since Sept. 15, when it launched a medium-range missile over the Northern Japanese island of Hokkaido. The North conducted its sixth and most recent nuclear test on Sept. 3.</p> <p><img alt="" src="" style="width: 500px; height: 332px;" /></p> <p>Still, the North&rsquo;s only nuclear test site appears to be undergoing needed repairs, and will likely remain unusable for the time being. While the third tunnel at the North&rsquo;s Punggye-ri nuclear complex remains ready for another detonation &ldquo;at any time&rdquo;, construction has only recently resumed at a fourth tunnel, leaving it vulnerable to collapse if the North were to conduct another test. Some have speculated that the North is holding off on another nuclear test under pressure from Beijing.</p> <p>Teams of <strong>Chinese and US scientists have warned that Punggye-ri is suffering from &ldquo;tired mountain syndrome&rdquo; &ndash; meaning another test could cause the mountain to cave in, releasing a deadly plume of radiation into the atmosphere</strong>. Last month, a tunnel collapse at the facility killed more than 200 North Korean laborers.</p> <p>&ldquo;The agency is closely following the developments because there is a possibility that North Korea could fire an array of ballistic missiles this year under the name of a satellite launch and peaceful development of space, but in fact to ratchet up its threats against the United States,&rdquo; the lawmakers told reporters after a closed-door briefing by the spy agency.</p> <p>Separately, for the first time in 20 years, Pyongyang is also carrying out a sweeping ideological scrutiny of the political unit of the military, one South Korean lawmaker said.&nbsp; The probe was led by the ruling Workers&rsquo; Party&rsquo;s Organisation and Guidance Department and orchestrated by Choe Ryong Hae, who once headed the General Political Bureau of the Korean People&rsquo;s Army himself until he was replaced by Hwang Pyong So in May 2014. As a result, Hwang and Kim Won Hong, who Seoul&rsquo;s unification ministry said was removed from office in mid-January as minister of the Stasi-like secret police called &ldquo;bowibu&rdquo;, had been punished, the lawmaker said. He did not elaborate.</p> <p><strong>Choe, who was subjected to political &ldquo;reeducation&rdquo; himself in the past, appears to be gaining more influence since he was promoted in October to the party&rsquo;s powerful Central Military Commission.</strong> The National Intelligence Service indicated that Choe now heads the Organisation and Guidance Department, a secretive body that oversees appointments within North Korea&rsquo;s leadership. &ldquo;Under Choe&rsquo;s command, the Organisation and Guidance Department is undertaking an inspection of the military politburo for the first time in 20 years, taking issue with their impure attitude toward the party leadership,&rdquo; the lawmaker, Kim, said.</p> <p>Also on Monday, South Korea approved a request by a South Korean to attend an event in the North marking the anniversary of the death of his mother who formerly led the Chondoist Chongu Party, a minor North Korean political party. The son, identified only by his surname Choi, will be the first South Korean to visit the North since liberal President Moon Jae-in took office in May. He is scheduled to arrive in Pyongyang via China on Wednesday and return on Saturday, according to Seoul&rsquo;s unification ministry.</p> <p><strong>Finally, a senior Chinese diplomat wrapped up a four-day visit to North Korea on Monday without meeting Kim Jong Un. The diplomat has returned to Beijing, Xinhua reported.</strong></p> <p>Song Tao, head of the international department of the Chinese Communist Party, met senior officials from the Workers Party of Korea and &ldquo;exchanged views on the Korean peninsula issue&rdquo;, according to Xinhua. &ldquo;The ruling parties of China and the Democratic People&rsquo;s Republic of Korea on Monday pledged to strengthen inter-party exchanges and coordination, and push forward relations,&rdquo; it added, using North Korea&rsquo;s official name.</p> <p>Song had been in Pyongyang to discuss the outcome of the recently concluded Chinese Communist Party Congress in Beijing. Meanwhile, a North Korean defector who was shot seven times while crossing the heavily fortified border separating the two countries has started breathing on his own, Yonhap reported, suggesting that he will most likely survive his injuries, leaving him free to start a new life in South Korea.</p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="634" height="421" alt="" src="" /> </div> </div> </div> Central Military Commission China Chinese Communist Party Chinese Communist Party Congress Chondoist Chongu Party Foreign relations of North Korea General Political Bureau of the Korean People Government Guidance Department KIM Kim dynasty Kim Jong-il Kim Jong-un Korea Korean People's Army Korean People’s Army long-range missile technology Marshals national intelligence National Intelligence Service None North Korea North Korea North Korean military North Korean nuclear test Party’s Organisation Politics Politics Pyongyang radiation South Korea South Korean intelligence South Korea’s National Intelligence Service SPY Unification Workers Party Workers’ Party of Korea Workers’ Party’s Organisation Mon, 20 Nov 2017 12:16:52 +0000 Tyler Durden 607571 at What German Political Turmoil? Global Markets BTFD, Don't Look Back <p>US index futures are unchanged, having recovered virtually all overnight session losses <a href="">alongside the EURUSD </a>following Merkel's <a href="">failure to form a government</a>, while European shares rise despite Angela Merkel's failure to form a new government. In the span of just hours, the goalseeked "hot take" consensus was that Germany’s collapsed coalition talks aren’t expected be a deal breaker for European equities due to the "strength of the German economy." </p> <p>As we pointed out earlier<a href="">, the euro reversed losses </a>as the London session unwound a sell-off in Asian time exacerbated by thin liquidity, while early strength in bunds was also faded. According to Citi, there were 3 possible reasons for the brief dip and subsequent strong rebound: 1. Merkel's failure was already discounted; 2. The market was positioned short ahead of the announcement; 3. There is too little clarity to trade.</p> <p> The Bloomberg Dollar Spot Index shed gains and stood little changed as the pound found a steady bid amid optimism that the U.K. is willing to move toward EU demands on a Brexit divorce bill.</p> <p><img src="" width="500" height="232" /></p> <p>The Stoxx Europe 600 Index rose as Germany’s DAX rebounded from a seven-week low; the Stoxx 600 rose 0.3% while Germany’s benchmark DAX Index climbed 0.2%; DAX futures earlier were down nearly -1%, on concerns surrounding the failed coalition talks in the country. Among European stocks, Automakers and health-care shares outperform after Volkswagen raised sales forecasts, while insurers are worst decliners on the European gauge. European equity traders and analysts say that the political uncertainty in Germany will likely not serve as a trigger for a broader market correction.</p> <p>Still, some were concerned: <strong>“You can imagine this will be bearish for the euro, at least in the tactical near-term, while the market comes to grips with what’s going on and will take a look at what her options are,” </strong>Kay Van-Petersen, global macro strategist at Saxo Capital Market, said in an interview with Bloomberg Television. “I’m fairly confident though that she’ll be able to come up with a different coalition at some point over the next few weeks.”</p> <p>Asia began the week subdued following the losses on Wall St. last Friday and with focus on political uncertainty after Trump campaigners were subpoenaed and German coalition talks broke down. Japanese sentiment was dampened by a firmer JPY and a miss on trade data. Hang Seng (+0.3%) and Shanghai Comp. (+0.3%) were initially negative with underperformance in the mainland as Shenzhen stocks resumed Friday’s sell off and amid reports that China tightened asset management rules to curb risky lending. However, prices then recovered heading into the close as markets took a closer look at plans to curb shadow banking. Finally, 10yr JGBs were uneventful with prices flat, as demand from the dampened risk appetite in the region was counterbalanced by the absence of a BoJ Rinban announcement.</p> <p>The recent pause in the relentless global rally which only cost central banks $2 trillion in liquidity in 2017 comes as investors gauge whether there are sufficient drivers to continue the march to historic highs. Solid earnings are offset by record valuations in virtually all markets, meanwhile red warning signs are being issued by the flattening U.S. yield curve: on Friday, the 2s10s again hit the tightest level in a decade, adding to concern about the pace of future economic growth. </p> <p>On the domestic agenda where recent euphoria was boosted by the momentum of GOP tax reform, over the weekend, Treasury Secretary Steven Mnuchin said he can’t guarantee Congress would preserve tax cuts (let Congress pass them first before worrying about preserving them), while Senator Susan Collins said the Senate tax plan passed by Committee needs work. </p> <p>In international geopolitics, German coalition talks broke down after FDP pulled out of discussions with German Chancellor Merkel's conservatives due to unrealistic differences. S&amp;P affirmed Switzerland at AAA; Outlook Stable and affirmed Netherlands at AAA; Outlook Stable. UK Chancellor Hammond stated that UK is on the brink of serious progress in Brexit discussions, while he also stated the UK will finally begin to see a reduction in public debt and that they will seek to curb health service measures in a balanced way. Reports further suggested that Hammond has put PM May under pressure to promise more money for the Brexit “divorce bill” by suggesting an improved offer will be made to Brussels within three weeks; an offer that the Times believe will be unveiled today. </p> <p>The dollar was steady, while West Texas oil held above $56 a barrel. Meanwhile, pound and gilts traders will focus on a potential downgrade to the U.K. growth outlook this week and the government’s efforts toward agreeing a Brexit divorce bill. Sterling was boosted on Monday by reports that the U.K. was preparing to make an enhanced divorce bill offer to the EU ahead of crucial talks starting next month. </p> <p>South Korea spy agency says North Korea can conduct nuke test at anytime, although there is no sign of an imminent test according to reports in Yonhap, reports also suggest that the North conducted engine tests. </p> <p>This week may see lower than normal volumes due to the Thanksgiving holiday in the U.S. Minutes from the Reserve Bank of Australia’s November meeting are due Tuesday, while those from the European Central Bank’s October meeting due out on Thursday could show dissent in the discussion about tapering. Federal Reserve Chair Janet Yellen gives a talk at New York University. Later in the week, reports on sales of previously owned homes and durable goods orders for October are due in the U.S. The minutes from the Fed’s latest policy meeting are out on Wednesday. Market participants will gauge Fed officials’ eagerness to boost the benchmark interest rate in December, which is widely expected by the market. On Wednesday, the U.K. announces its budget Wednesday; that could see a significant economic downgrade amid a continued impasse in its negotiations with the EU on Brexit.</p> <p><strong>Bulletin Headline Summary from RanSquawk</strong></p> <ul> <li>German concerns short - lived with EUR paring back losses seen in the wake of coalition talks breaking down</li> <li>Weekend press reports in the UK suggest that UK PM May could be on the cusp of&nbsp; promising more money to the&nbsp; EU in order settle the "Brexit Bill"</li> <li>Looking ahead, highlights include potential comments from ECB’s Lautenschlaeger, Draghi, Constancio and BoE’s Ramsden</li> </ul> <p><strong>Market Snapshot</strong></p> <ul> <li>S&amp;P 500 futures down 0.1% to 2,572.25</li> <li>MSCI Asia down 0.07% to 170.29</li> <li>MSCI Asia ex Japan up 0.09% to 559.78</li> <li>Nikkei down 0.6% to 22,261.76</li> <li>Topix down 0.2% to 1,759.65</li> <li>Hang Seng Index up 0.2% to 29,260.31</li> <li>Shanghai Composite up 0.3% to 3,392.40</li> <li>Sensex up 0.2% to 33,396.87</li> <li>Australia S&amp;P/ASX 200 down 0.2% to 5,945.67</li> <li>Kospi down 0.3% to 2,527.67</li> <li>STOXX Europe 600 up 0.01% to 383.85</li> <li>German 10Y yield rose 0.4 bps to 0.365%</li> <li>Euro up 0.08% to $1.1799</li> <li>Italian 10Y yield fell 0.2 bps to 1.57%</li> <li>Spanish 10Y yield fell 0.8 bps to 1.547%</li> <li>Brent Futures down 0.4% to $62.46/bbl</li> <li>Gold spot down 0.03% to $1,292.09</li> <li>U.S. Dollar Index down 0.05% to 93.61</li> </ul> <p><strong>Top Overnight news</strong></p> <ul> <li>German Chancellor Angela Merkel declared failure in her bid to form a new government, throwing the future of Europe’s longest- serving leader into doubt and potentially pointing toward new elections</li> <li>Possibilities now include setting up a minority government headed by her Christian Democratic-led bloc or asking President Frank-Walter Steinmeier to order a national election just months after the last one in September</li> <li>Special Counsel Robert Mueller directed the Justice Department to turn over a broad array of documents, ABC reports; Mueller’s investigators seek emails related to firing of FBI Director James Comey and the decision of Attorney General Jeff Sessions to recuse himself from the entire matter</li> <li>U.S. Treasury Secretary Steven Mnuchin says he doesn’t know whether Congress would extend individual tax cuts that would expire after 2025 in current tax proposal; White House chief economist Kevin Hassett argues that the tax overhaul will boost productivity</li> <li>Chile’s presidential election is heading for a hotly contested second round after billionaire Sebastian Pinera took a smaller-than-expected lead in Sunday’s vote</li> <li>The value of Japan’s exports rose 14% y/y (forecast +15.7%) in Oct.; imports increased 18.9% (forecast +20.2%); the trade surplus was 285.4b yen, less than the forecast of 330 billion yen</li> <li>After nine years, two presidential decisions, multiple lawsuits and<br /> environmental protests, TransCanada Corp. is about to learn whether it<br /> will receive the final state permit needed to build the Keystone XL oil<br /> pipeline</li> <li>The Republican tax-overhaul effort is in for a marathon debate on the Senate floor at the end of this month, with dozens of doomed Democratic amendments. But the real action will be elsewhere, behind closed doors</li> <li>Global investment banking revenues may decline 9 percent this quarter on low volatility and a selloff of high-yield debt, analysts at JPMorgan Chase &amp; Co. said</li> <li>Marvell Technology Group Ltd., a chipmaker looking to build itself a future outside of a declining area of the market, agreed to buy Cavium Inc. for about $6 billion</li> <li>President Robert Mugabe shocked Zimbabwe on Sunday night with a televised address that failed to announce his highly anticipated resignation, a dramatic twist that means the 93-year-old may face immediate impeachment hearings</li> <li>The U.K. could be about to improve its financial offer to the European Union ahead of a crucial meeting of the bloc’s leaders in December</li> <li>HNA CEO Casts Doubts on SkyBridge Deal Completion, WSJ Says</li> <li>Novomet Purchase by Halliburton Said to Be Delayed: Kommersant</li> <li>U.S. Businesswoman Said to Bid for Weinstein Co.: WSJ </li> <li>Some Chrysler Pacifica Owners Complain of Engine Issues: NYT</li> <li>ProSieben Is ‘Obvious’ M&amp;A Target, Possibly for NBC: Liberum</li> <li>Cellcom in Talks With Partner Comm to Deploy Fiber Network</li> <li>Eurocastle Reports NPL Transaction, Reschedules Results Release</li> <li>Goldman CEO Sees Frankfurt, Paris As His Bank’s EU Hubs: Figaro</li> </ul> <p><strong>Asia began the week subdued following the losses on Wall St. </strong>last Friday and with focus on political uncertainty after Trump campaigners were subpoenaed and German coalition talks broke down. ASX 200 (-0.2%) and Nikkei 225 (-0.5%) were in the red although recent strength across commodities helped stem losses in Australia, while Japanese sentiment was dampened by a firmer JPY and a miss on trade data. Hang Seng (+0.3%) and Shanghai Comp. (+0.3%) were initially negative with underperformance in the mainland as Shenzhen stocks resumed Friday’s sell off and amid reports that China tightened asset management rules to curb risky lending. However, prices then recovered heading into the close. Finally, 10yr JGBs were&nbsp; uneventful with prices flat, as demand from the dampened risk appetite in the region was counterbalanced by the absence of a BoJ Rinban announcement. PBoC injected CNY 70bln via 7-day reverse repos, CNY 20bln via 14-day reverse repos and CNY 10bln via 63-day reverse repos.&nbsp; PBoC set CNY mid-point at 6.6271 (Prev. 6.6277). Chinese Property Prices (Oct) Y/Y 5.4% (Prev. 6.3%). Chinese Property Prices rose M/M in 50 out of 70 cities (Prev. 44) and rose Y/Y in 60 out of 70 cities (Prev. 67).&nbsp; Japanese Exports (Oct) Y/Y 14.0% vs. Exp. 15.8% (Prev. 14.1%) Japanese Imports (Oct) Y/Y 18.9% vs. Exp. 20.2% (Prev. 12.0%)</p> <p><em>Top Asian News</em></p> <ul> <li>Soros’ Wang Said to Leave to Start Hedge Fund in Hong Kong</li> <li>Thailand’s Economic Growth Beats Forecasts as Exports Rise</li> <li>Barcelo Makes Offer for NH in Bid to Create Spanish Hotel Giant</li> <li>Zarrab Case Aims to Implicate Turkish Leaders, Erdogan Aide Says</li> <li>Alibaba Bets $2.9 Billion It Can Take on Wal-Mart in China</li> <li>Asia Shares Fall as Investors Lock in Gain Amid U.S. Tax Wrangle</li> <li>Toshiba’s Share Sale Plan Cheers Bond Market as Stocks Fall</li> </ul> <p><strong>European bourses have had a mixed start for the week, with the EuroStoxx 50 relatively flat </strong>amid the collapse of German government coalition talks, while on the corporate front, German Utilities RWE and Innogy are rising over divestiture speculation. Roche are among the best performing stocks this morning after the drugmaker announced a double dose of trial wins. No further political news or fundamental inputs to spark movement, but Bunds are back in the black and it looks like short term or intraday chart levels are impacting. Contacts were flagging 162.82 on the downside and that just held in to keep sellstops intact and the 10 year German bond has subsequently bounced towards 163.00 again. Back to the Government coalition impasse, the President will address the nation at 13.30GMT and could call another election given the failure of talks and Chancellor Merkel to form a new regime, but there is a train of thought that he might make a last ditch effort to get the parties back around the table. Meanwhile, Gilts continue to track moves elsewhere awaiting more concrete Brexit developments and Wednesday’s Budget, ticking back up to 124.65 from a 124.53 low. US Treasuries maintaining a firmer bias, and with the long bond outperforming yet again – so even more flattening.</p> <p><em>Top European News</em></p> <ul> <li>Merkel’s Attempt to Form a New German Government Collapses</li> <li>German Liberals Would Support a Merkel Minority Government: Bild</li> <li>Michael Spencer’s NEX Group Picks Amsterdam as Post- Brexit Base</li> <li>Vestas Shares Fall; Goldman Sees Margin Pressure in 2018</li> <li>Jana Novotna, Former Wimbledon Champion, Dies at 49</li> <li>Akbank’s Rota Is Said to Become Bank Audi’s Turkey Unit CEO</li> </ul> <p><strong>In FX, </strong>the EUR roundtriped as Germany’s FDP walks out of talks to form a 4-party Jamaican coalition after a month of negotiations, citing irretrievable differences. Chancellor Merkel must now inform the President of the situation and the risk is a snap election and failure to secure a 4th term in office. EUR/USD slumped to a 1.1723 base before recovering, with bids touted at 1.1710, while EUR/GBP held key support at 0.8871 (21 DMA) despite filling bids at 0.8875 before rebounding towards 0.8900. GBP: A firmer tone independent of the EUR’s travails on latest reports suggesting material progress in Brexit negotiations in the offing, while UK Chancellor Hammond is apparently encouraging PM May to up her divorce settlement offer to the EU. Cable back up near 1.3250. Benefiting from broad risk-off sentiment, with USD/JPY briefly/marginally below 112.00, but now pivoting the big figure and likely to be eyeing a spread of option expiries in nearby proximity (300 mn at 111.90, 901 mn at 112.00, 2.3 bn at 112.30 and 1 bn from 112.50-60).</p> <p><strong>In commodities,</strong> price action WTI and Brent has been relatively tepid with investors turning their attention to the bi-annual OPEC meeting, in which it is expect that the cartel will extend production cuts to cover the whole of next year. On Friday, the latest Baker Hughes showed that rig counts were unchanged in week to November 17th. WTI slightly off best levels having run into resistance just ahead of USD 57.</p> <p><strong>US Event Calendar</strong></p> <ul> <li>10am: Leading Index, est. 0.7%, prior -0.2%</li> </ul> <p><strong>DB's Jim Reid concludes the overnight wrap</strong></p> <p>The most interesting thing to get your teeth stuck in to this week is likely to be the turkey on Thankgiving on Thursday. As such it'll likely be a quietish week unless we see a renewed bout of the Wednesday to Wednesday sell-off of last week. Things calmed down from the lows during Wednesday's session even if we closed out the week on Friday with a softer session for equities.</p> <p>That said, things have already got to an interesting start as talks to form the next coalition German government have failed after a 12 hour negotiation session ended at around midnight last night, with the pro-market FDP walking out citing large differences with the environmentalist Green party. The head of the FDP Mr Lindner noted “it’s better not to govern than to govern badly”. If no compromise is eventually found, Germany may enter into unchartered territory, potentially involving a new election or even a minority led government. The Euro is&nbsp; down c0.5% this morning.</p> <p>This morning in Asia, markets are trading modestly lower. The Nikkei (-0.45%), Kospi (-0.01%) and Hang Seng (-0.07%) are weaker, while Chinese bourses have pared back bigger losses to be down c0.7% as we type, with the underperformance in part due to Chinese regulators announcing new measures to regulate asset management products from June 2019. The draft measures include: i) an end to short-term investment products with (implicit) guaranteed fixed rates of return and ii) uniform guidance for banks, trust, insurers and brokerages. Elsewhere, over the weekend, Reuters noted Chinese home prices rose in 50 of 70 cities in October (vs. 44 cities previous). The average price rise was stronger for the month at 0.3% mom (vs. 0.2% previous), but annual growth still slowed to 5.4% yoy (vs. 6.3% previous).</p> <p>Back to the days ahead, in this holiday shortened week, the highlights will likely be the EU Foreign and European affairs ministers discussing Brexit today (with a Barnier briefing after), the UK budget on Wednesday (look out for looser fiscal policy), the flash European PMIs on Thursday and the first store sales numbers coming through on 'Black Friday' as we close out the week. These numbers are perhaps less relevant than they used to be as internet shopping increases but it’s always a focal point nonetheless. </p> <p>Turning to US tax reforms, where a step change does not seem likely until the revised tax package goes to a full Senate chamber vote, potentially in the week after Thanksgiving (week from 27th Nov.). Before then, there was more rhetoric over the weekend. Republican Senator Collins said the tax package “needs work” and “want to see changes in that bill”, although she has not reached a conclusion on whether to vote for the current plans or not. One of the issues is the new provision to remove the individual mandate of the Obamacare care, which she noted was a “problem” and that “I don’t think that provision should be in the bill”. In response, Director of the Office of Management and budget Mr Mulvaney noted that the White House is “ok” in removing the mandate if it was an impediment to passing the Senate tax bill, although White House legislative Director Mr Short said “we like the fact that the Senate has included it”. As a reminder, the Republicans need &gt;50 votes to pass the Senate bill and currently control 52 of the 100 seats in the Chamber.</p> <p>Moving onto Brexit, there appears to be more signs that the UK may be willing to concede to an improved Brexit settlement offer to kick start the Brexit talks. The FT has reported that PM May could get cabinet approval today to as much as double her prior settlement offer of EUR$20bln. Elsewhere, Chancellor Hammond noted “we’ve always been clear it won’t be easy to work out that number, but whatever is due, we will pay” and that “we will make our proposals to the EU in time for the council (meeting in c3 weeks). I’m sure about that”. On the other side, the EC President Tusk was firm when he met with PM May last Friday, as he noted “I made it clear to PM May that this progress needs to happen at the beginning of December at the latest” and that “if there is no sufficient progress, I will not be in a position to propose new guidelines on transition (and trade talks)”. Elsewhere, in a preview to the UK budget this week, Chancellor Hammond has noted the government will announce a plan to increase house building by c40% to 300k new homes being built each year.</p> <p>Now quickly recapping market performance on Friday. Ahead of the quieter Thanksgiving week, US bourses weakened. The S&amp;P (-0.26%), Dow (-0.43%) and Nasdaq (-0.15%) all down modestly. Within the S&amp;P, modest gains in the telco and discretionary consumer sectors were more than offset by losses from utilities and tech stocks. European markets also trended lower, with Stoxx 600 (-0.29%), DAX (-0.41%) and FTSE (-0.08%) all down slightly.</p> <p>Over in government bonds, core yields were 1-3bp lower (UST 10y -3.2bp; Bunds -1.6bp; Gilts -1.4bp) while peripherals were little changed. Turning to currencies, the US dollar index weakened 0.29% while Sterling and the Euro gained 0.15% and 0.17% respectively. In commodities, WTI oil rose 2.56% following Saudi Arabia reaffirmed its willingness to extend oil cuts at the November 30 OPEC meeting. Elsewhere, precious metals gained c1% (Gold +1.08%; Silver +1.29%) and other base metals also advanced slightly (Copper +0.13%; Zinc 1.06%; Aluminium flat).</p> <p>Now onto a fascinating story of our times namely Bitcoin. The crypto currency has not only recovered from recent losses, it has now moved to a fresh all-time high of cUS$8,007 a piece this morning. To put this in context, Bitcoin is up c23% over the last week and up 136% since its recent lows back in mid-September.&nbsp; Going back further, it is up c8.4x YTD and up 679x from 5 years ago.</p> <p>Away from the markets now and onto central bankers’ commentaries back on Friday. The ECB’s Draghi noted that “as the labour market tightens and uncertainty falls, the relationship between slack and wage growth should begin reasserting itself. But we have to remain patient.” Elsewhere, the ECB’s Weidmann echoed those sentiments, noting “domestic price pressure will gradually increase in keeping with a path towards our definition of price stability”. </p> <p>Turning to Catalonia, the latest opinion poll by GAD3 suggests voter participation could be a record high of 82% for the upcoming regional election on 21st December but the pro-independence coalition may only win 66-69 of the seats, falling short of a clear majority which requires 68 seats.</p> <p>Staying with polls, the latest Ifop poll suggest France President Macron’s popularity has improved 4ppt to 46% - the highest in four months, in part as Bloomberg noted voters are crediting their President with keeping some of his campaign promises.</p> <p>Before we take a look at today’s calendar, we wrap up with other data releases from Friday. In the US, the November Kansas Fed manufacturing activity was below expectations at 16 (vs. 21), but is still reasonably solid. The Atlanta Fed’s GDPNow model estimate of 4Q GDP growth ended the week at 3.4% (+0.2pps following the strong IP data). The October housing starts were above expectations at 13.7% mom (vs. 5.6% expected), with increases seen in all major regions with the exception of the West. Housing permits were slightly lower at 1,250k (vs. 1,297k expected). Elsewhere, 3Q mortgage delinquencies rose from the post-GFC low in 2Q to 4.88% (vs. 4.24% previous), while foreclosure rate continues to trend down, now to a new post-GFC low of 1.23%.</p> <p>In the Eurozone, the September current account surplus widened to 37.8bln (vs. 33.3bln previous). Elsewhere, Canada’s headline October inflation measure was in line at 0.1% mom and 1.4% yoy, while the core median reading was slightly lower at 1.7% yoy (vs. 1.8% previous).</p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="296" height="170" alt="" src="" /> </div> </div> </div> 2s10s 2s10s 2s10s. Aftermath of the United Kingdom European Union membership referendum Angela Merkel ASX 200 Atlanta Fed Australia Bank Audi’s Turkey Unit Bank of Japan Bitcoin Bloomberg Dollar Spot Bond Brexit Business Central Banks China Chrysler Congress Copper DAX 30 Department of Justice European Central Bank European Union European Union European Union Euroscepticism in the United Kingdom EUROSTOXX 50 Eurozone FBI Federal Bureau of Investigation federal government Federal Reserve fixed flash France German government German Lutherans Germany Gilts Government Green Party Hang Seng 40 Housing Starts Janet Yellen Japan Jim Reid JPMorgan Chase Kansas Fed Merkel Minority Government NASDAQ NBC Netherlands New York University Nikkei Nikkei 225 North Korea Obamacare office of Management OPEC Organization of Petroleum-Exporting Countries Precious Metals Price Action Republican Party Reserve Bank of Australia Reuters S&P S&P 500 S&P/ASX 200 Saudi Arabia Senate Shadow Banking Shenzhen SPY Stoxx 600 STOXX Europe 600 Switzerland Theresa May Turkey U.S. Treasury US Dollar Index US Federal Reserve Volatility Volkswagen West Texas White House White House Withdrawal from the European Union Yen Yield Curve Mon, 20 Nov 2017 12:00:09 +0000 Tyler Durden 607572 at Meanwhile In Sweden, Crime Hits All Time Highs <p>It appears<strong> President Trump,</strong> having warned that Sweden&#39;s huge intake of refugees would lead to <em>&quot;problems like they never thought possible,&quot;</em> has been <strong>vindicated</strong>.</p> <p><a href=""><img height="327" src="" width="600" /></a></p> <p>Following<strong> media mockery</strong> and Sweden&#39;s official Twitter account responding:</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>&ldquo;Hey Don, this is @Sweden speaking! It&rsquo;s nice of you to care, really, but don&rsquo;t fall for the hype. Facts: We&rsquo;re OK!&rdquo;</p> </blockquote> <p><a href="">Trump reacted by tweeting</a>...</p> <blockquote class="twitter-tweet"><p dir="ltr" lang="en">Give the public a break - The FAKE NEWS media is trying to say that large scale immigration in Sweden is working out just beautifully. NOT!</p> <p>&mdash; Donald J. Trump (@realDonaldTrump) <a href="">February 20, 2017</a></p></blockquote> <script src=""></script><p><strong>And now nine months later, Trump&#39;s worst fears - and the lies of Swedish authorities - have been confirmed</strong>.</p> <p><a href=""><img height="303" src="" width="600" /></a></p> <p><a href="">Bloomberg reports that</a> <strong>the number of Swedes who were victims of crimes such as fraud and sexual offenses jumped to the highest level on record last year</strong>.</p> <p><a href="">A&nbsp;survey&nbsp;by the Swedish National Council for Crime Prevention </a>showed that 15.6 percent of people suffered one or more offences against the person (defined in the survey as assault, threats, sexual offences, robbery, fraud or harassment) last year. That&rsquo;s up from 13.3 percent in 2015 and the <strong>highest number recorded since the&nbsp;annual Swedish Crime Survey started in 2006.</strong></p> <p><a href=""><img alt="" src="" style="width: 600px; height: 300px;" /></a></p> <p><strong>The number of offences against individuals &ldquo;was at a relatively stable level 2005 to 2014, at 11.3 percent to 13.1 percent, but the last two years show an increase,&rdquo;</strong> the council said in the report published this week.</p> <p>Now... what changed in the last two years in Europe? ...</p> <p><a href=""><img alt="" src="" style="width: 600px; height: 424px;" /></a></p> <p>The c<strong>rimes &ldquo;that have had the clearest development in the past few years are harassment, fraud and sexual offences,&rdquo;</strong> the agency said.</p> <p>Of the six types of offences against the person, five of six rose to their highest level on record last year. The number of assault cases reached its second-highest level.</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><strong>&ldquo;Young women aged between 16 and 24 is the group that&rsquo;s most subject to sexual offences, with 14 percent of young women stating that they were victims of at least one such crime during 2016,&rdquo;</strong> the council said.</p> <p>&nbsp;</p> <p>&ldquo;Among men in the same age group, 1.2 percent said they had been victims.&rdquo;</p> </blockquote> <p>And on the heels of that; buoyed by the stunning success of the <a href="">It&rsquo;s Ok To Be White</a>&nbsp;campaign,<a href=""> Squawker reports</a> that 4chan&#39;s infamous politically incorrect board has now seemingly moved on to their next example of expert level political trolling... taking aim at modern Sweden.</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><u><strong>Operation Swedistan </strong></u>as users have taken to calling it,<a href="">&nbsp;follows the usual 4chan strategy</a>&nbsp;of attempting to <strong>trick extremist liberals into siding with a progressive cause that&nbsp;would seem ridiculous or even outright appalling to the average person.</strong></p> <p>&nbsp;</p> <p>In this case the goal is simple, <strong>convince Sweden to change its flag design. </strong>More specifically, to remove the Christian cross and install an Islamic crescent in its place.</p> <p>&nbsp;</p> <p><a href=""><img alt="" src="" style="width: 600px; height: 332px;" /></a></p> <p>&nbsp;</p> <p><strong>To be clear, no one involved expects or or wants this to actually happen obviously.</strong> But if even one actual Swedish official is perceived to, for even for a moment actually consider implementing such a change. The hope is that will be enough to upset what the operations organizers refer to as the &ldquo;left-leaning normie&rdquo; masses.</p> <p>&nbsp;</p> <p>A full rundown of the basic strategy can be seen here below.</p> <p>&nbsp;</p> <p><a href=""><img alt="" src="" style="width: 600px; height: 114px;" /></a></p> </blockquote> <p>A formal mass petition to the Swedish Prime Minister has also been launched sitting at over 2,300 signatures in less than 24 hours time already. Among other things it states the following.</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>&ldquo;<strong>The Swedish flag is a constant reminder of our dark and oppressive past.</strong> Refugees and migrants are forced to live under its Christian Cross; a symbol of the Crusades and the slaughter of millions of innocent Islamic lives in Sweden&rsquo;s past that makes them feel unwelcome and unsafe.</p> <p>&nbsp;</p> <p><strong>Sweden should be a safe space for everyone. As our outdated national symbol gradually becomes the banner of Xenophobic and racist extremist groups, we must think into the future. </strong>A future of peace, understanding and tolerance.&rdquo;</p> </blockquote> <p>We leave you with Sweden&#39;s new ambassador to Iceland&#39;s recent comments that sparked a major controversy after he warned that <strong>Sweden is &quot;in the process of dismantling democracy&quot; </strong>and could be on a <strong>slippery slope towards technocracy or a dictatorship.</strong></p> <p><a href=""><img height="304" src="" width="600" /></a></p> <p>Håkan Juholt, a former leader of the centre-left Social Democrat party and <strong>ambassador to Iceland since September, </strong>made the comments in an interview with the&nbsp;<a href="" target="_blank">Svenska Dagbladet </a>newspaper.</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><em><strong>&quot;How old is your son? Four?&quot; </strong></em>he asks the reporter.</p> <p>&nbsp;</p> <p><em><span style="text-decoration: underline;"><strong>&quot;When he is old he won&#39;t be living in a democracy but in a technocracy, or a dictatorship. It&#39;s sad as hell. I am sorry to say it, but I am 100 percent sure. We are in the process of dismantling democracy.&quot;</strong></span></em></p> </blockquote> <p>Later in the interview, he says:</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><strong>&quot;I don&#39;t think the threat is a dictatorship with tanks rolling on Sergel&#39;s Square (a well-known square in central Stockholm), but an expert rule where we do not let the citizens&#39; values govern the country.</strong> Democracy is slipping through our fingers. Fewer people want to be elected, the parties are toning down their ideology.</p> <p>&nbsp;</p> <p><strong>Sure, I see a risk that it may become a dictatorship in the long run.&quot;</strong></p> </blockquote> <p>His brutal honesty in a diplomatic role appears to have ruffled more than a few feathers... much like President Trump&#39;s.</p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="1100" height="600" alt="" src="" /> </div> </div> </div> Business Donald Trump Donald Trump on social media Economy of the United States Iceland Newspaper Social Democrat party Social Issues Sweden Swedish National Council for Crime Prevention Twitter Twitter United States Mon, 20 Nov 2017 11:15:00 +0000 Tyler Durden 607565 at Charles Manson Dies; The World's Morbid Fascination Continues <p>Charles Manson, the mass-murderer and leader of the &quot;<a href="">drug-induced flock of followers </a>&quot; known as the Manson family died aged 83 of natural causes at 8.13pm on Sunday night.</p> <p>Although his followers committed the seven &ldquo;Tate-La Bianca&rdquo; murders in the summer of 1969, Manson was convicted of murder for directing them and was sentenced to death in 1971. He was spared when the death penalty was abolished in California following a supreme court ruling in 1972. Footage of Manson and his female followers in the Manson family have surfaced a number of times over the years as their bids to be released were repeatedly rejected at parole hearings. During a parole hearing in 2012, John Peck, a member of the parole panel, <a href="">quoted</a> Manson as saying to one of his prison psychologists.</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>&ldquo;I&rsquo;m special. I&rsquo;m not like the average inmate. I have spent my life in prison. I have put five people in the grave. I am a very dangerous man.&rdquo;</p> </blockquote> <p>Following Manson&rsquo;s death, a statement was released by the California Department of Corrections and Rehabilitation which contained the most recent photo.<br />&nbsp;<br /><a href=""><img alt="" src="" style="width: 600px; height: 704px;" /></a></p> <p>From the <a href=",-whose-cult-slayings-horrified-world,-dies">Associated Press</a>.</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>In the summer of 1969, a scruffy ex-convict with a magnetic hold on young women sent some of his disciples into the night to carry out a series of gruesome killings in Los Angeles. In so doing, Charles Manson became the leering face of evil on front pages across America and rewrote the history of an era. Manson, the hippie cult leader who died of natural causes Sunday at age 83 after nearly half a century behind bars, orchestrated the slayings of pregnant actress Sharon Tate and six other people, butchered at two homes on successive August nights by intruders who scrawled &ldquo;Pigs&rdquo; and &ldquo;Healter Skelter&rdquo; (sic) in the victims&rsquo; blood. The slaughter horrified the world. To many, the collateral damage included the era of peace, love and flower power. The Manson Family killings, along with the bloodshed later that year during a Rolling Stones concert at California&rsquo;s Altamont Speedway, seemed to expose the violent and drug-riddled underside of the counterculture and sent a shiver of fear through America. <strong>&ldquo;Many people I know in Los Angeles believe that the Sixties ended abruptly on August 9, 1969,&rdquo; author Joan Didion wrote in her 1979 book &ldquo;The White Album.&rdquo;</strong></p> </blockquote> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>Manson was every parent&rsquo;s worst nightmare. <strong>The short, shaggy-haired man with hypnotic eyes was a charismatic figure with a talent for turning middle-class youngsters into mass murderers</strong>. At a former movie ranch outside Los Angeles, he and his devotees &mdash; many of them young runaways who likened him to Jesus Christ &mdash; lived commune-style, using drugs and taking part in orgies. Children from privileged backgrounds ate garbage from supermarket trash. &ldquo;These children that come at you with knives, they are your children. You taught them; I didn&rsquo;t teach them. I just tried to help them stand up,&rdquo; he said in a courtroom soliloquy.</p> </blockquote> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>Fear swept the city after a maid reporting for work ran screaming from the elegant home where Tate lived with her husband, &ldquo;Rosemary&rsquo;s Baby&rdquo; director Roman Polanski. Scattered around the estate were blood-soaked bodies. The beautiful 26-year-old actress, who was 8&frac12; months pregnant, was stabbed and hung from a rafter in her living room. Also killed were Abigail Folger, heiress to a coffee fortune; Polish film director Voityck Frykowksi; Steven Parent, a friend of the estate&rsquo;s caretaker; and celebrity hairdresser Jay Sebring, killed by Manson follower Charles &ldquo;Tex&rdquo; Watson, who announced his arrival by saying: <strong>&ldquo;I am the devil, and I&rsquo;m here to do the devil&rsquo;s work.&rdquo; The next night, wealthy grocer Leno LaBianca and his wife, Rosemary, were stabbed to death in their home in another neighborhood. Manson was arrested three months later.</strong></p> </blockquote> <p>The rationale for Manson&rsquo; murder spree has been much discussed in the intervening 48 years. <strong>The most colourful explanation is that he believed that the lyrics in the Beatles&rsquo; White Album, notably the song &ldquo;Helter Skelter&rdquo;, were directing him to start a race war in America. Helter Skelter is also the name of the best-selling book about the Manson family murders written by his prosecutor, Vincent Bugliosi. </strong>An alternative explanation is that he was angry with society when, unlike the Beatles<strong>, he was denied a recording contract. </strong>Manson&rsquo;s background was undoubtedly a contributing factor as AP continues:</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>Manson&rsquo;s childhood was a blueprint for a life of crime. He was born in Cincinnati on Nov. 12, 1934, to a teenager, possibly a prostitute. When he was 5, his mother went to prison for armed robbery. By the time he was 8, he was in reform school. He spent years in and out of penal institutions. &ldquo;My father is the jailhouse. My father is your system,&rdquo; he said in a monologue on the witness stand. &ldquo;I am only what you made me. I am only a reflection of you.&rdquo;</p> </blockquote> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><strong>Manson&rsquo;s chaotic trial in 1970 transformed a courtroom into a theater of the absurd</strong>. He and three female followers, Susan Atkins, Patricia Krenwinkel and Leslie Van Houten, sang and chanted, and Manson at one point launched himself across the counsel table at the judge. Many of his followers camped outside the courthouse, threatening to immolate themselves if he was convicted. When Manson carved an &ldquo;X&Prime; in his forehead, his co-defendants did the same, saying they were &ldquo;Xed out of society.&rdquo; <strong>He later changed his &ldquo;X&Prime; to a swastika. Despite the overwhelming evidence, he maintained his innocence. &ldquo;I have killed no one, and I have ordered no one to be killed,&rdquo; Manson said.</strong></p> </blockquote> <p>Manson&rsquo;s wild-eyed stare and the brutality of the murders have sustained a morbid fascination for people in the US and around the world. This is from the <a href="">New York Times</a>.</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>The Tate-LaBianca killings and the seven-month trial that followed were the subjects of fevered news coverage. <strong>To a frightened, mesmerized public, the murders, with their undercurrents of sex, drugs, rock &rsquo;n&rsquo; roll and Satanism, seemed the depraved logical extension of the anti-establishment, do-your-own-thing ethos that helped define the &rsquo;60s</strong>. Since then, the Manson family has occupied a dark, persistent place in American culture &mdash; and American commerce<strong>. It has inspired, among other things, pop songs, an opera, films, a host of internet fan sites, T-shirts, children&rsquo;s wear and half the stage name of the rock musician Marilyn Manson.</strong></p> </blockquote> <p>This is AP&rsquo;s take on the same issue.</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>&ldquo;<strong>The Manson case, to this day, remains one of the most chilling in crime history</strong>,&rdquo; prominent criminal justice reporter Theo Wilson wrote in her 1998 memoir, &ldquo;Headline Justice: Inside the Courtroom &mdash; The Country&rsquo;s Most Controversial Trials.&rdquo;</p> <p>&nbsp;</p> <p>&ldquo;Even people who were not yet born when the murders took place,&rdquo; Wilson wrote, &ldquo;know the name Charles Manson, and shudder.&rdquo;</p> </blockquote> <p><a href=""><img alt="" src="" style="width: 600px; height: 538px;" /></a></p> <p>We suspect that now he&rsquo;s dead, the fascination with Charles Manson and the &ldquo;Tate-La Bianca&rdquo; killings is not going to diminish, far from it. <strong>At its heart, people still want an answer to the question &ldquo;why?&rdquo;. </strong></p> <p>The New York Times summed it up this way: &quot;Throughout the decades since, Mr. Manson has remained an enigma. Was he a paranoid schizophrenic, as some observers have suggested? Was he a sociopath, devoid of human feeling? Was he a charismatic guru, as his followers once believed and his fans seemingly still do? Or was he simply flotsam, a man whose life, The New York Times wrote in 1970, &ldquo;stands as a monument to parental neglect and the failure of the public correctional system.&quot;</p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="751" height="436" alt="" src="" /> </div> </div> </div> Apocalypticism California Department of Corrections and Rehabilitation Charles Manson Eat Me, Drink Me Eschatology Helter Skelter Leslie Van Houten Manson Family Marilyn Manson New York Times Patricia Krenwinkel Religion Susan Atkins Vincent Bugliosi Mon, 20 Nov 2017 10:44:20 +0000 Tyler Durden 607569 at